Presented below are the production data for the first six months of the year for the mixed costs incurred by Venus Company.

Venus Company uses the high-low method to analyze mixed costs.
How would the cost function be stated?
A) y = $1,080 + $0.98X
B) y = $4,900 + $1.25X
C) y = $2,510 + $0.98X
D) y = $9,900 + $1.10X

Question

Presented below are the production data for the first six months of the year for the mixed costs incurred by Venus Company.

Venus Company uses the high-low method to analyze mixed costs.
How would the cost function be stated?
A) y = $1,080 + $0.98X 
B) y = $4,900 + $1.25X 
C) y = $2,510 + $0.98X 
D) y = $9,900 + $1.10X

Quizplus · Accepted Answer

b = ($9,900 - $5,000) / (9,000 - 4,000) = $0.98
$9,900 = a + $0.98 × 9,000
a = $1,080
Cost function is Y = $1,080 + $0.98X

Presented Below Are the Production Data for the First Six