When Using the Visual-Fit Method to Estimate a Cost Function,we

question 130

Multiple Choice

When using the visual-fit method to estimate a cost function,we can estimate the fixed cost by ________.

• A) the point where the sketched line (through all or most of the data points) intersects the x-axis
• B) the point where the sketched line (through all or most of the data points) intersects the y-axis
• C) calculating the variable cost per unit of the cost driver
• D) subtracting the variable cost at any cost driver level from the total cost

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Definitions:

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set.

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings.

Common Shares

Equity securities that represent ownership in a company, giving shareholders voting rights and a share in the company's profits through dividends.

Non-GAAP Measures

Financial metrics not conforming to Generally Accepted Accounting Principles, often used by management to provide additional insight into the company's performance or financial position.