Gelrud Corporation's Recent Utility Costs Are Listed Below: Management Believes

question 16

Multiple Choice

Gelrud Corporation's recent utility costs are listed below: Management believes that utility cost is a mixed cost that depends on machine-hours.
-Using the least-squares regression method,the estimate of the fixed component of utility cost per month is closest to:

• A)$19,733
• B)$5,809
• C)$19,962
• D)$5,628

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Definitions:

Indifferent

A state of having no preference between two or more options, showing neither favor nor disfavor.

Variable Costs

Costs that vary directly with the level of production or sales volume.

Average Costs

The total costs (fixed and variable) of production divided by the total quantity of output, indicating the cost of producing each unit.

Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and loan payments.