(Appendix 2A)Your boss would like you to estimate the fixed and variable components of a particular cost.Actual data for this cost over four recent periods appear below. Using the least-squares regression method, what is the cost formula for this cost?
A)Y = $0.00 + $7.55X
B)Y = $110.44 + $2.70X
C)Y = $103.38 + $3.00X
D)Y = $113.35 + $0.89X

Question

(Appendix 2A)Your boss would like you to estimate the fixed and variable components of a particular cost.Actual data for this cost over four recent periods appear below.  Using the least-squares regression method, what is the cost formula for this cost?
A)Y = $0.00 + $7.55X 
B)Y = $110.44 + $2.70X 
C)Y = $103.38 + $3.00X 
D)Y = $113.35 + $0.89X

Quizplus · Accepted Answer

Using Microsoft Excel, the slope and intercept are:
 11eaa0c8_9717_47d4_9cb2_5b9981785b89_TB2487_00 Therefore, the cost formula is $110.44 per activity plus $2.70 per unit or:
Y = $110.44 + $2.70X

(Appendix 2A)Your Boss Would Like You to Estimate the Fixed