The following cost formula was developed using monthly data for a retail clothing store. Total cost = $50,000 + ($250 × number of customers)
The number $50,000:
A) is the unknown variable
B) is the dependent variable.
C) is the intercept.
D) is the slope rate.

Question

The following cost formula was developed using monthly data for a retail clothing store. Total cost = $50,000 + ($250 × number of customers)
The number $50,000:
A) is the unknown variable
B) is the dependent variable. 
C) is the intercept.
D) is the slope rate.

Quizplus · Accepted Answer

The intercept corresponds to fixed cost.Therefore, $50,000 in the cost formula is the fixed cost.

The Following Cost Formula Was Developed Using Monthly Data for a Retail