Answer the Following Questions Using the Information Below:
Uninder Company

question 37

Multiple Choice

Answer the following questions using the information below:
Uninder Company uses the high-low method to estimate the cost function. The information for 2015 is provided below:
$\begin{array}{lll}&\text { Machine-hours } & \text { Labor Costs }\\\text { Highest observation of cost driver } & 550 & \$ 22,000 \\\text { Lowest observation of cost driver } & 250 & \$ 13,000\end{array}$
-What is the estimated cost function for the above data?

• A) y = 13,000 + 43.75X
• B) y = 5,500 + 30X
• C) y = 22,000 + 40X
• D) y = 16,500 + 52X

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Definitions:

Lag Indicators

Metrics that reflect the results of actions already taken, helpful in assessing past performance but not in predicting future activities.

Du Pont Chart

A graphical representation that breaks down the return on equity into its components to help analyze a company's financial performance.

Lead Indicators

Metrics that provide early signs of future trends, allowing businesses to anticipate changes and adjust strategies accordingly.

Invested Capital

The total amount of money that shareholders and debt holders have invested in a company for long-term use.