For April, the month just ended, the cost components to make tapes were $2 per tape plus fixed costs of $10,000.One thousand tapes were produced.For May the cost to make tapes will be $2.20 per tape plus fixed costs of $10,000.Fifteen hundred tapes are expected to be produced.What are the estimates for the intercept and slope coefficient for May, respectively?
A)$2.00 and $10,000.00
B)$2.20 and $10,000.00
C)$10,000.00 and $2.00
D)$10,000.00 and $2.20
E)$22,000 and $10,000

Question

Quizplus · Accepted Answer

Intercept is the fixed cost of producing the tapes, which is the same for both April and May, i.e. $10,000.

Slope coefficient is the incremental cost of producing one additional tape, which has increased from $2 in April to $2.20 in May. Therefore, the slope coefficient for May is $2.20.

For April, the Month Just Ended, the Cost Components to Make