The equation for department S1 (building occupancy)is
A)S1 = .10S3.
B)S1 = $85,000 + 1.00S3.
C)S1 = $85,000 + .10S3.
D)S1 = $85,000 + .90S2 + .10S3.

Question

Quizplus · Accepted Answer

The equation for department S1 includes a fixed cost of $85,000 and a variable cost based on S3, but the coefficient for S3 is only 0.10. This means that S3 has a relatively small impact on department S1 compared to the fixed cost.

The Equation for Department S1 (Building Occupancy)is