The Following Data Pertains to Activity and Maintenance Cost for Two

question 19

Multiple Choice

The following data pertains to activity and maintenance cost for two recent periods: Maintenance cost is a mixed cost with both fixed and variable components.Using the high-low method, the cost formula for maintenance cost is:

• A)Y = $4.25 X
• B)Y = $14,000 + $2.50 X
• C)Y = $2,500 + $4.25 X
• D)Y = $4.50 X

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Definitions:

Single Investment Application Rate

A metric used to assess the potential return on an individual investment to determine its profitability or effectiveness.

Overhead Application

The process of assigning or allocating overhead costs to produced goods or services, often using a predetermined overhead rate.

Activity-Based Management Method

The activity-based management method is a technique that uses detailed information about activities and their costs to manage and improve business processes.

Support Department Costs

Expenses incurred by the service departments that assist other internal departments rather than directly producing a product or service.