In describing the cost equation, Y = a + bX, 'a' is
A)the dependent variable, cost.
B)the independent variable, the level of activity.
C)the total fixed costs.
D)the variable cost per unit of activity.

Name: In describing the cost equation, Y = a + bX, 'a' is A)the dependent variable, cost. B)the independent variable, the level of activity. C)the total fixed costs. D)the variable cost per unit of activity.
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Question

Quizplus · Accepted Answer

'a' represents the intercept or total fixed costs, which do not vary with the level of activity.

In Describing the Cost Equation, Y = a + BX