Question

Select a linear cost function equation for each of the following conditions. Use y for estimated costs and X for activity of the cost driver.a.Direct materials cost is ​$1.40 per poundb.Total cost is fixed at $ 8 comma 500 per month regardless of the number of units produced.c.Auto rental has a fixed fee of ​$70.00 per day plus ​$2.00 per mile driven.d.Machine operating costs include ​$1 comma 600 of maintenance per​ month, and ​$10.00 of coolant usage costs for each day the machinery is in operation.

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Use y for estimated costs and X for the activity of the cost driver.

a. Direct materials cost is ​$1.40 per pound.

Y= 1.4x

b. The total cost is fixed at $8,500 per month regardless of the number of units produced.

Y= 8,400

c.The auto rental has a fixed fee of ​$70.00 per day plus ​$2.00 per mile driven.

Y= 70 + 2x

d.Machine operating costs include ​$1,600 of maintenance per​ month and ​$10.00 of coolant usage costs for each day the machinery is in operation.

Y= 1,600 + 10x