Figure 3-10.The following cost formula was developed using the monthly data for an accounting firm.Total cost = $87,100 + ($210 * number of tax returns)
-Refer to Figure 3-10. The term $87,100
A) is the independent variable.
B) is the dependant variable.
C) is the intercept.
D) is the variable rate.

Question

Quizplus · Accepted Answer

The term $87,100 is the intercept or the fixed cost component of the cost formula. It represents the cost that the firm incurs even when the number of tax returns filed is zero.