In the regression equation Y = $6000 + (per unit cost 'x' number of units), the '$6000' is a __________?
Correct answer: A. constant
- A. constant
- B. variable
- C. expression
- D. base and exponent
Explanation
In Y = a + bX, the constant a is the intercept, representing the estimated cost when activity is zero. Here, $6000 is therefore the constant term.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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