(Appendix 2A)Cespedes Inc.'s inspection costs are listed below: Management believes that inspection cost is a mixed cost that depends on units produced. Using the least-squares regression method, the estimate of the variable component of inspection cost per unit produced is closest to:
A)$5.40
B)$5.33
C)$5.43
D)$16.07

Question

(Appendix 2A)Cespedes Inc.'s inspection costs are listed below:  Management believes that inspection cost is a mixed cost that depends on units produced. Using the least-squares regression method, the estimate of the variable component of inspection cost per unit produced is closest to:
A)$5.40 
B)$5.33 
C)$5.43 
D)$16.07

Quizplus · Accepted Answer

Using Microsoft Excel functions, the solution is:
Variable cost per unit produced = Slope = $5.43