Lacourse Incorporated's inspection costs are listed below: Management believes that inspection cost is a mixed cost that depends on units produced.Using the least-squares regression method, the estimate of the fixed component of inspection cost per month is closest to:

Question

Lacourse Incorporated's inspection costs are listed below:  Management believes that inspection cost is a mixed cost that depends on units produced.Using the least-squares regression method, the estimate of the fixed component of inspection cost per month is closest to:

Quizplus · Accepted Answer

Using the least-squares regression method, we can estimate the fixed component of the inspection cost. The fixed component can be represented by the intercept of the regression line.

From the graph, we can estimate the intercept to be around $9,587. Therefore, the best choice is C.

Lacourse Incorporated's Inspection Costs Are Listed Below: Management Believes