Question

The following data relates to indirect labour expenses and the level of output

Months	Jan	Feb	Mar	Apr	Mar	June
Units of output	200	300	400	640	540	580
Indirect labour expenses (Rs)	2500	2800	3100	3820	3220	3640

 

Estimate the expenses at a level of output of 350 units, by using the graphic method.

Answer 1

Take the units of output along the x-axis, labor expenses along the y-axis. 

The points to be plotted are (200, 2500), (300, 2800) (400, 3100), (640, 3820), (540, 3220), (580, 3640)

From the graph, the expenses at a level of output of 350 units are Rs. 2940.