Exhibit 5-6
Regression analysis for Barton Industries results in the following output.
$$\begin{array} { l r }
&\text { Coefficients } \
\text { $ Y $ Intercept } & 880 \
\text { $ X $ Variable } & 1,016.75
\end{array}$$
-Refer to Exhibit 5-6.Using the information above,what is the cost equation in the form Y = f + vX?
A)880 = f + v (1,016.75)
B)Y = 1,016.75 + 880X
C)1,016.75 = 880 + vX
D)Y = 880 + 1,016.75X
E)None of the answer choices is correct.

Question

Exhibit 5-6
Regression analysis for Barton Industries results in the following output.
 $$\begin{array} { l r } 
&\text { Coefficients } \ 
\text { $ Y $ Intercept } & 880 \
\text { $ X $ Variable } & 1,016.75 
\end{array}$$
-Refer to Exhibit 5-6.Using the information above,what is the cost equation in the form Y = f + vX?
A)880 = f + v (1,016.75)
B)Y = 1,016.75 + 880X
C)1,016.75 = 880 + vX
D)Y = 880 + 1,016.75X
E)None of the answer choices is correct.

Quizplus · Accepted Answer

The cost equation is in the form Y = f + vX, where Y is the total cost, f is the fixed cost, v is the variable cost per unit, and X is the number of units produced. Looking at the regression output, we can see that the intercept (fixed cost) is $880 and the slope (variable cost per unit) is $1,016.75. Therefore, the cost equation is Y = 880 + 1,016.75X.

Exhibit 5-6 Regression Analysis for Barton Industries Results in the Following

Exhibit 5-6
Regression Analysis for Barton Industries Results in the Following