Based on analyzing the relationship of total factory overhead (Y) to direct labor hours (X). The following relationship was found:
Y = $1,000 + $2X
The variable Y in the equation is an estimate of:
A) Total variable costs.
B) Total factory overhead.
C) Total fixed costs.
D) Total direct labor hours.

Question

Quizplus · Accepted Answer

The equation shows that Y, which represents total factory overhead, is a function of direct labor hours (X) and includes a fixed cost component of $1,000. Therefore, option B, total factory overhead, is the best choice.

Based on Analyzing the Relationship of Total Factory Overhead (Y)