The Following Data Pertains to Activity and Utility Cost for Two

question 97

Multiple Choice

The following data pertains to activity and utility cost for two recent periods: Utility cost is a mixed cost with both fixed and variable components.Using the high-low method, the cost formula for utility cost is:

• A)Y = $1.00 X
• B)Y = $1.25 X
• C)Y = $4, 000 + $0.50 X
• D)Y = $1, 500 + $1.25 X

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Definitions:

Relevant Range

The range of activity over which the assumptions about cost behavior for a company are valid.

Activity Level

A measure of the volume or intensity of operations in a business, often influencing costs and production capacity.

Activity Level

A measure of the volume of production or operations, often influencing costs and used for budgeting and performance measurement.

Delivery Costs

Expenses related to transporting goods from one location to another, including shipping, handling, and packaging costs.