The Longreach Toy Factory has determined machine hours to be the cost driver of the company's electricity costs. During the first six months of the year, the company incurred the following electricity costs:
Using the high-low method, determine the cost formula that expresses the cost behaviour of the company's electricity costs.
A) Y = $3735 + $6.20X
B) Y = $1664 + $8.38X
C) Y = $4760 + $5.00X
D) Y = $4400 + $5.50X

Question

The Longreach Toy Factory has determined machine hours to be the cost driver of the company's electricity costs. During the first six months of the year, the company incurred the following electricity costs: 
Using the high-low method, determine the cost formula that expresses the cost behaviour of the company's electricity costs.
A) Y = $3735 + $6.20X 
B) Y = $1664 + $8.38X 
C) Y = $4760 + $5.00X 
D) Y = $4400 + $5.50X

Quizplus · Accepted Answer

The Answer of The Longreach Toy Factory has determined machine hours to be the cost driver of the company's electricity costs. During the first six months of the year, the company incurred the following electricity costs: 
Using the high-low method, determine the cost formula that expresses the cost behaviour of the company's electricity costs.
A) Y = $3735 + $6.20X 
B) Y = $1664 + $8.38X 
C) Y = $4760 + $5.00X 
D) Y = $4400 + $5.50X

The Longreach Toy Factory Has Determined Machine Hours to Be