Ruth was attempting to estimate a model for her small business's overhead costs. She is 99.9% sure that overhead costs are driven primarily by production, but she also knows that this cost isn't entirely variable. So the grabbed the last 8 months of production and overhead cost data, listed it out, and plotted it as follows. # of Units Produced Month 1 2 3 7 250 210 280 340 360 320 270 290 Overhead Cost $2.730 1.990 2440 3.070 2,740 2,980 2440 3,240
Ruth was attempting to estimate a model for her small business's overhead costs. She is 99.9% sure that overhead costs are driven primarily by production, but she also knows that this cost isn't entirely variable. So the grabbed the last 8 months of production and overhead cost data, listed it out, and plotted it as follows. # of Units Produced Month 1 2 3 7 250 210 280 340 360 320 270 290 Overhead Cost $2.730 1.990 2440 3.070 2,740 2,980 2440 3,240
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Accounting
![(a1)
Ruth is planning to use the high-low method to estimate this cost function. Is it important for the data to exhibit a linear
relationship when using this method?
It
(b)
is
Your answer is correct.
eTextbook and Media
Y-S
important for the data to exhibit a linear relationship.
Help Ruth estimate her company's overhead costs using the high-low method. Write your final model in YmX)+ b format.
eTextbook and Media
Save for Later
Attempts: 1 of 3 used
X+S
Attempts: 0 of 3 used Submit Answer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F01d01b29-ede7-42ba-8dcd-8c0b18e94cc8%2F5bad2a75-10e8-4aff-ace9-27c700c52bda%2Fgsnht4r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(a1)
Ruth is planning to use the high-low method to estimate this cost function. Is it important for the data to exhibit a linear
relationship when using this method?
It
(b)
is
Your answer is correct.
eTextbook and Media
Y-S
important for the data to exhibit a linear relationship.
Help Ruth estimate her company's overhead costs using the high-low method. Write your final model in YmX)+ b format.
eTextbook and Media
Save for Later
Attempts: 1 of 3 used
X+S
Attempts: 0 of 3 used Submit Answer
![Ruth was attempting to estimate a model for her small business's overhead costs. She is 99.9% sure that overhead costs are driven
primarily by production, but she also knows that this cost isn't entirely variable. So she grabbed the last 8 months of production and
overhead cost data, listed it out, and plotted it as follows
Month
1
2
3
4
5
6
7
8
(a1)
# of Units Produced
is
250
210
280
340
360
320
270
290
Your answer is correct
Overhead Cost
$2,730
eTextbook and Media:
1.990
2440
3.070
2,740
Ruth is planning to use the high-low method to estimate this cost function is it important for the data to exhibit a linear
relationship when using this method?
important for the data to exhibit a linear relationship.
2,980
2440
3.240](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F01d01b29-ede7-42ba-8dcd-8c0b18e94cc8%2F5bad2a75-10e8-4aff-ace9-27c700c52bda%2F7tt8o5w_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Ruth was attempting to estimate a model for her small business's overhead costs. She is 99.9% sure that overhead costs are driven
primarily by production, but she also knows that this cost isn't entirely variable. So she grabbed the last 8 months of production and
overhead cost data, listed it out, and plotted it as follows
Month
1
2
3
4
5
6
7
8
(a1)
# of Units Produced
is
250
210
280
340
360
320
270
290
Your answer is correct
Overhead Cost
$2,730
eTextbook and Media:
1.990
2440
3.070
2,740
Ruth is planning to use the high-low method to estimate this cost function is it important for the data to exhibit a linear
relationship when using this method?
important for the data to exhibit a linear relationship.
2,980
2440
3.240
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education