ACCOUNTING
Multiple Choice
The Gangwere Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Gangwere Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.
The Gangwere Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Gangwere Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.
Month Cost Hours
January $40,000 3,500
February 24,400 2,000
March 31,280 2,450
April 36,400 3,000
May 44,160 3,900
June 42,400 3,740
How is the cost function stated?
a. y = $26,672 + $1.84X
b. y = $21,360 + $1.52X
c. y = $10,112 + $8.64X
d. y = $3,600 + $10.40X
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