The Following Information Was Taken from a Computer Printout Generated

question 38

Multiple Choice

The following information was taken from a computer printout generated with the least-squares method for use in estimating overhead costs: $$\begin{array} { l l } \text { Slope } & 45 \\\text { Intercept } & 5,700 \\\text { Correlation coefficient } & .72 \\\text { Activity variable } & \text { Direct 1abor hours }\end{array}$$ The cost formula is

• A)Overhead = $5,700 − $45X
• B)Overhead = $5,700 + $45X
• C)Overhead = $5,700 + ($45 × 0.72)
• D)Overhead = $5,700 × 0.72

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Definitions:

Economies Of Scale

Reductions in average total cost as output rises.

Treasury Reserves

Funds or assets held by a country's treasury to manage the economy’s money supply, stabilize currencies, or finance emergencies.

Comparative Advantage

The economic principle that nations should produce and export goods in which they have the lowest relative cost of production.

Western European Countries

Nations located in the western part of Europe, often characterized by developed economies, democratic governance, and high living standards.