A linear cost function is estimated over the relevant range of 0 to 1,000 orders.The equation estimated is: Y = $25,000 + $89X where Y equals the total order-processing cost and X equals the number of orders.If the number of orders increases to 1,800,what is the predicted total order-processing cost?
A) $25,000
B) $160,200
C) $185,200
D) cannot be determined

Question

Quizplus · Accepted Answer

The cost function is only valid within the relevant range of 0 to 1,000 orders. Since 1,800 orders exceed this range, the predicted cost cannot be determined using the given equation.

A Linear Cost Function Is Estimated Over the Relevant Range