Compute the estimated costs for each of the following equations, assuming the following costs for July:

In addition, state whether each is for a variable, fixed, or mixed cost.
a. Total estimated costs = intercept
b. Total estimated costs = constant
c. Total estimated costs = constant + (slope × cost driver)
d. Total estimated costs = slope coefficient × cost driver

Question

Compute the estimated costs for each of the following equations, assuming the following costs for July:

In addition, state whether each is for a variable, fixed, or mixed cost.
a. Total estimated costs = intercept
b. Total estimated costs = constant
c. Total estimated costs = constant + (slope × cost driver)
d. Total estimated costs = slope coefficient × cost driver

Quizplus · Accepted Answer

The Answer is a. fixed, $40,000
b. fixed, $40,000
c. mixed, $40,000 + ($6 × 1,000) = $46,000
d. variable, $6 × 1,000 = $6,000

Compute the Estimated Costs for Each of the Following Equations