The Delmonico Company uses the high-low method to estimate the cost function. The information for 2011 is provided below: Machine-hours Labor Costs Highest observation of cost driver 400 Lowest observation of cost driver 240 $20,000 $13,600 What is the constant for the estimating cost equation? A. $4,000 B. $13,600 C. $16,000 D. $20,000

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
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Chapter5: Process Costing
Section: Chapter Questions
Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...
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What is the constant for the estimating cost equation for this accounting question?

The Delmonico Company uses the high-low method to estimate
the cost function. The information for 2011 is provided below:
Machine-hours Labor Costs
Highest observation of cost driver 400
Lowest observation of cost driver 240
$20,000
$13,600
What is the constant for the estimating cost equation?
A. $4,000
B. $13,600
C. $16,000
D. $20,000
Transcribed Image Text:The Delmonico Company uses the high-low method to estimate the cost function. The information for 2011 is provided below: Machine-hours Labor Costs Highest observation of cost driver 400 Lowest observation of cost driver 240 $20,000 $13,600 What is the constant for the estimating cost equation? A. $4,000 B. $13,600 C. $16,000 D. $20,000
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