Consider the following linear mixed-cost function: Y = $72,000 + $7.70X
Where: Y = total annual custodial cost
What does the $7.70 represent?
A)variable cost per patient-day
B)total variable cost
C)fixed cost per patient-day
D)total fixed cost

Question

Consider the following linear mixed-cost function: Y = $72,000 + $7.70X
Where: Y = total annual custodial cost
 What does the $7.70 represent?
A)variable cost per patient-day 
B)total variable cost 
C)fixed cost per patient-day 
D)total fixed cost

Quizplus · Accepted Answer

The $7.70 represents the variable cost per patient-day, as it is the coefficient of the independent variable X in the mixed-cost function.

Consider the Following Linear Mixed-Cost Function: Y = $72,000