Asked by
Alexandra Isabelle
on Oct 11, 2024
Verified
In describing the cost formula equation, Y = a + bX, which of the following is correct:
A) "Y" is the independent variable.
B) "a" is the variable cost per unit.
C) "a" and "b" are valid for all levels of activity.
D) in the high-low method, "b" equals the change in cost divided by the change in activity.
Cost Formula Equation
An equation used to predict the total cost of production, combining both fixed and variable costs.
High-low Method
A technique used in cost accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.
- Identify the differences between the high-low technique, scattergraph approach, and least-squares regression in the context of cost evaluation.
Verified Answer
CB
Learning Objectives
- Identify the differences between the high-low technique, scattergraph approach, and least-squares regression in the context of cost evaluation.