The managers of the production department have decided to use the production levels of 2015 and 2016 as examples of the highest and lowest years of operating levels.Data for those years are as follows:
$\begin{array}{lll}\text { Year}&\text { Chemicals used}&\text { Overhead Costs }\
2015 & 336,000 \text { gallons } & \$ 292,800 \
2016 & 288,000 \text { gallons } & \$ 254,400
\end{array}$ Required:
What is the cost estimating equation for the department if gallons of chemicals are used as the cost driver?

Question

The managers of the production department have decided to use the production levels of 2015 and 2016 as examples of the highest and lowest years of operating levels.Data for those years are as follows:
 $\begin{array}{lll}\text { Year}&\text { Chemicals used}&\text { Overhead Costs }\
2015 & 336,000 \text { gallons } & \$ 292,800 \
2016 & 288,000 \text { gallons } & \$ 254,400
\end{array}$ Required:
What is the cost estimating equation for the department if gallons of chemicals are used as the cost driver?

Quizplus · Accepted Answer

The Answer of The managers of the production department have decided to use the production levels of 2015 and 2016 as examples of the highest and lowest years of operating levels.Data for those years are as follows:
 $\begin{array}{lll}\text { Year}&\text { Chemicals used}&\text { Overhead Costs }\
2015 & 336,000 \text { gallons } & \$ 292,800 \
2016 & 288,000 \text { gallons } & \$ 254,400
\end{array}$ Required:
What is the cost estimating equation for the department if gallons of chemicals are used as the cost driver?

The Managers of the Production Department Have Decided to Use