This question is 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 variable Y represents the estimate of total factory overhead, therefore the correct choice is B, total factory overhead. Option A is incorrect because Y includes a fixed cost component of $1,000, making it not solely variable costs. Option C is incorrect because Y includes a variable cost component of $2X. Option D is incorrect because the equation relates Y, not X.

This Question Is Based on Analyzing the Relationship of Total