Focus, Inc.operates a small package delivery service in the Atlanta suburbs.If the company uses a regression equation to forecast total operating costs, the equation's intercept would correspond to the:
A)variable operating cost per delivery.
B)ﬁxed operating costs.
C)number of deliveries.
D)total variable operating costs.
E)total operating costs.

Question

Quizplus · Accepted Answer

The intercept of a regression equation represents the fixed costs, which are the costs that do not vary with the number of deliveries. The slope of the equation would represent the variable costs per delivery. Therefore, the intercept would correspond to the fixed operating costs.