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.

Question

Zack Bowman

Business

23 June, 15:23

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.

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Answers (1)

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Zoie Gonzales · Answer 1

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