Use the information below to answer the following question(s).At the high point of the relevant range, labour hours at Bradco Restoration were 10,000 and wages were $22,500.At the low point of the relevant range, labour hours were 7,500 and wages were $17,500.
-When using the high-low method, the denominator in the equation that determines the slope is the
A)dependent variable.
B)independent variable.
C)difference between the high and low observations of the cost driver.
D)difference between the high and low observations of the dependent variables.
E)the intercept.

Question

Quizplus · Accepted Answer

The denominator in the equation that determines the slope is the difference between the high and low observations of the cost driver. In this case, the cost driver is labour hours. Therefore, the difference between the high and low labour hours (10,000 - 7,500 = 2,500) is used as the denominator to determine the slope.

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