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.
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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