In determining cost behavior in business, the cost function is often expressed as Y= a+bX. Which on the the following cost estimate methods should NOT be used in estimating fixed and variable costs for the equation?
A Scattergraph method
B Simple regression
C High-Low point method
D Multiple regression
E Management analysis of data
Answer: E
In the cost equation TC=F+VX, X is best described as the:
A costs that do not vary with changes in the activity level.
B costs that do vary with changes in the activity level.
C total cost estimate at a particular activity level.
D activity level used to estimate the total cost
Answer: D
A manager is trying to estimate the manufacturing costs of a new product. The company makes several other products that utilize some of the same manufacturing procedures as the new product. Which cost estimate method would be the best method to determine the total cost of manufacturing the new product?
A Engineering estimates
B Regression analysis
C Account Analysis
D Scattergraph
E High-low
