Descoteaux 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)$1,979
B)$6,033
C)$5,624
D)$2,021

Question

Descoteaux 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)$1,979 
B)$6,033 
C)$5,624 
D)$2,021

Quizplus · Accepted Answer

Using Microsoft Excel functions,the solution is:
Fixed cost per month = Intercept = $1,979