Answer the Following Questions Using the Information Below:
Presented Below

question 41

Multiple Choice

Answer the following questions using the information below:
Presented below are the production data for the first six months of the year for the mixed costs incurred by Benalla Company.
$$\begin{array} { l r r } \text { Month } & \text { Cost } & \text { Units } \\\text { January } & \$ 4890 & 4100 \\\text { February } & 4024 & 3200 \\\text { March } & 6480 & 5300 \\\text { April } & 8840 & 7500 \\\text { May } & 5800 & 4800 \\\text { June } & 7336 & 6600\end{array}$$ Benalla Company uses the 'high-low method' to analyse mixed costs.
-How would the cost function be stated?

• A)y = $440 + $1.12X
• B)y = $7850 + $0.132X
• C)y = $3 562.30 + $0.144X
• D)y = $107.20 + $1.224X

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Definitions:

Useful Life

The period over which an asset is expected to be used by an entity, or its lifespan for accounting purposes.

Residual Value

The estimated value of a fixed asset at the end of its useful life.

Average Rate

A mean value calculated to represent the typical rate of something, such as interest, return, or speed, over a given period.

Fixed Asset

Long-term tangible property that a firm owns and uses in its operations to generate income, such as buildings and machinery.