Saturday, June 25, 2011

What is the constant for the estimating cost equation?

ACCOUNTING

Multiple Choice

The Hunter Company uses the high-low method to estimate the cost function. The information for 20x3 is provided below:

Machine-hours Labor Costs

Highest observation of cost driver 400 $10,000

Lowest observation of cost driver 240 $ 6,800


What is the constant for the estimating cost equation?

a. $2,000

b. $6,800

c. $8,000

d. $10,000

Click here for the SOLUTION

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