The Managers of the Production Department Have Decided to Use

question 168

Essay

The managers of the production department have decided to use the production levels of 2012 and 2018 as examples of the highest and lowest years of operating levels.Data for those years are as follows:
$$\begin{array} { c c c } \text { Year } & \text { Chemicals Used } & \text { Overhead Costs } \\2012 & 200000 \text { litres } & \$ 135000 \\2018 & 150000 \text { litres } & \$ 105000\end{array}$$
Required:
What is the cost estimating equation for the department if litres of chemicals are used as the cost driver?
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Definitions:

Current Account Deficit

A measure that shows when a country's total imports of goods, services, and transfers are greater than its total exports. It indicates the country is spending more on foreign trade than it is earning.

Budget Deficit

When federal tax receipts are less than federal government spending.

Trade Deficit

A situation where the value of a country's imports exceeds the value of its exports.

Gold Standard

A monetary system in which the value of a country's currency is directly linked to a certain amount of gold, ensuring that the currency has a stable value.