Use the information below to answer the following question(s).
The Monroe Company uses the high-low method to estimate the cost function. The information for the current year is provided below.

-What is the constant for the estimating cost equation?
A) $2,080
B) $2,960
C) $3,970
D) $4,000
E) $8,000

Question

Use the information below to answer the following question(s).
The Monroe Company uses the high-low method to estimate the cost function. The information for the current year is provided below.
 
-What is the constant for the estimating cost equation?
A) $2,080 
B) $2,960 
C) $3,970 
D) $4,000 
E) $8,000

Quizplus · Accepted Answer

EITHER: Constant = $4,000 - ($8.00 × 240 hours) = $2,080
OR: Constant = $2,960 - ($8.00 × 110 hours) = $2,080

Use the Information Below to Answer the Following Question(s)