A cost accountant is developing a regression model to predict the total cost of producing a batch of car seats as a linear function of batch size (the number of seats produced in one lot or batch).The intercept of this model is the ___.
A)batch size
B)unit variable cost
C)fixed cost
D)total cost
E)total variable cost

Question

Quizplus · Accepted Answer

The intercept of a regression model represents the starting point of the regression line, where the value of the independent variable (batch size) is 0. In this case, the intercept would represent the fixed costs of producing the car seats, which would be incurred even if no car seats were produced. Therefore, the correct answer is C, fixed cost.

A Cost Accountant Is Developing a Regression Model to Predict