Question Details

What is the constant for the estimated cost equation



Answer the following questions using the information below: 

Uninder Company uses the high-low method to estimate the cost function. The information for 2015 is provided below:
	Machine-hours	Labor Costs
	Highest observation of cost driver	550	$22,000
	Lowest observation of cost driver	250	$ 13,000

1) What is the slope coefficient?
A) $52.00 
B) $43.75 
C) $30.00 
D) $40.00 


2) What is the constant for the estimated cost equation? 
A) $5,500 
B) $13,000 
C) $16,500 
D) $22,000 


3) What is the estimated cost function for the above data?
A) y = 13,000 + 43.75X 
B) y = 5,500 + 30X
C) y = 22,000 + 40X
D) y = 16,500 + 52X


4) What is the estimated total cost when 400 machine-hours are used? 
A) $20,800 
B) $29,000 
C) $16,000 
D) $17,500 





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