Supply Costs at Chobot Corporation's Chain of Gyms Are Listed

question 78

Multiple Choice

Supply costs at Chobot Corporation's chain of gyms are listed below: Management believes that supply cost is a mixed cost that depends on client-visits. Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first, rounding off to the nearest whole cent. Then compute the fixed component, rounding off to the nearest whole dollar. Those estimates are closest to:

• A)$2.18 per client-visit; $26,745 per month
• B)$1.01 per client-visit; $14,330 per month
• C)$1.04 per client-visit; $13,949 per month
• D)$0.99 per client-visit; $14,607 per month

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Definitions:

Dependent Variable

The component in an experiment or research that is foreseen to shift following changes in the independent variable.

Independent Variable

A variable often denoted as x, whose variation does not depend on that of another.

Correlation Coefficient

A statistical measure that calculates the strength and direction of the linear relationship between two variables.

Correlation Coefficient

An index assessing the power of association between a pair of variables.