(Appendix 5A) Lacourse 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 fixed component of inspection cost per month is closest to:
A) $9,608
B) $15,640
C) $9,587
D) $15,271

Question

(Appendix 5A) Lacourse 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 fixed component of inspection cost per month is closest to:
A) $9,608 
B) $15,640 
C) $9,587 
D) $15,271

Quizplus · Accepted Answer

Using Microsoft Excel functions, the solution is:
Fixed cost per month = Intercept = $9,587