You are applying the scattergraph method and find that the regression line you have drawn passes through a data point with the following coordinates: 1,000 units and $9,600.The regression line passes through the Y axis at the $600 point.Which of the following is the cost formula that represents the slope of this line?
A)Y = $600 + $9.00X
B)Y = $600 + $9.60X
C)Y = $9,600 + $.06X
D)None of the above is true.

Question

Quizplus · Accepted Answer

Variable cost = Change in cost F1F1F1S1F1F1F10 Change in activity
= ($9,600 - $600) F1F1F1S1F1F1F10 (1,000 - 0) = $9.00
Since the regression line passes through the Y axis at the $600 point,the $600 represents the fixed costs.
Therefore,the cost formula would be Y = $600 + $9.00X.

You Are Applying the Scattergraph Method and Find That the Regression