(Appendix 5A) Recent Maintenance Costs of Divers Corporation Are Listed

question 75

Multiple Choice

(Appendix 5A) Recent maintenance costs of Divers Corporation are listed below:
Management believes that maintenance cost is a mixed cost that depends on machine-hours.
-Using the least-squares regression method,the estimate of the fixed component of maintenance cost per month is closest to:

• A) $5,139
• B) $2,806
• C) $4,973
• D) $2,738

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Definitions:

Indirect Method

A way to present the cash flow statement where net income is adjusted for non-cash transactions, changes in working capital, and operational activities to yield cash flow from operations.

Depreciation Expense

An accounting method used to allocate the cost of a tangible or physical asset over its useful life.

Operating Activities

The primary revenue-generating activities of a business, including the production, sales, and delivery of the company's products and services.

Investing Activities

Part of a company's cash flow statement that shows the cash spent on investments in capital assets and any cash received from the sale of those assets.