(Appendix 5A) Electrical Costs at One of Rome Corporation's Factories

question 37

Multiple Choice

(Appendix 5A) Electrical costs at one of Rome Corporation's factories are listed below:
Management believes that electrical cost is a mixed cost that depends on machine-hours.
-Using the high-low method,the estimate of the fixed component of electrical cost per month is closest to:

• A) $822
• B) $743
• C) $38
• D) $944

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Definitions:

Ordinal Scale

A scale of measurement in which the measurement categories form a rank order along a continuum.

Unobtrusive Measure

Research methods that do not involve direct interaction with the participants, minimizing the influence of the measurement process on the results.

Convergent Validity

The extent to which two measurements of constructs, which are expected to have a theoretical correlation, actually do exhibit a relationship.

Reactivity

The alteration of the behavior of study participants due to their awareness of being observed.