Answer the following questions using the information below:
The Badr Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Badr Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.

-How is the cost function stated?
A) y = $10,112 + $8.64X
B) y = $21,360 + $10.40
C) y = $3,600 + $10.40X
D) y = $26,672 + $1.84X

Question

Answer the following questions using the information below:
The Badr Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Badr Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.
 
-How is the cost function stated?
A) y = $10,112 + $8.64X 
B) y = $21,360 + $10.40 
C) y = $3,600 + $10.40X 
D) y = $26,672 + $1.84X

Quizplus · Accepted Answer

The cost function is typically stated as y = mx + b, where y is the total cost, m is the variable cost per unit, x is the number of units, and b is the fixed cost. Choice C correctly represents this format with $3,600 as the fixed cost and $10.40 as the variable cost per unit.

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