Presented below are the production data for the first six months of the year for the mixed costs incurred by Venus Company.

Venus Company uses the high-low method to analyze mixed costs.
How would the cost function be stated?
A)y = $1,080 + $0.98X
B)y = $4,900 + $1.25X
C)y = $2,510 + $0.98X
D)y = $9,900 + $1.10X

Question

Presented below are the production data for the first six months of the year for the mixed costs incurred by Venus Company.

Venus Company uses the high-low method to analyze mixed costs.
How would the cost function be stated?
A)y = $1,080 + $0.98X 
B)y = $4,900 + $1.25X 
C)y = $2,510 + $0.98X 
D)y = $9,900 + $1.10X

Quizplus · Accepted Answer

b = ($9,900 − $5,000)/ (9,000 − 4,000)= $0.98
$9,900 = a + $0.98 × 9,000
a = $1,080
Cost function is Y = $1,080 + $0.98X

Presented Below Are the Production Data for the First Six