The Following Information Was Taken from a Computer Printout Generated

question 13

Multiple Choice

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

• 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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