The y-intercept of a linear cost function is an accurate cost assessment of using zero machine-hours,even if zero machine-hours is outside of the relevant range.

Question

Quizplus · Accepted Answer

The y-intercept may not accurately represent the cost at zero machine-hours if it is outside of the relevant range. In addition, the relevant range, which is the range of activity or level of machine-hours where the cost function is valid, is important in determining the accuracy of the y-intercept.

The Y-Intercept of a Linear Cost Function Is an Accurate