In describing the cost formula equation Y = a + bX, which of the following statements is NOT correct? A As "X" increases "Y" increases. B "X" is the level of activity. In the high-low method, "b" equals change in activity divided by change in costs. "a" is the fixed component.

In describing the cost formula equation Y = a + bX, which of the following statements is NOT correct? A As "X" increases "Y" increases. B "X" is the level of activity. In the high-low method, "b" equals change in activity divided by change in costs. "a" is the fixed component.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

In describing the cost formula equation Y = a + bX, which of the following statements is NOT correct?
(A As "X" increases "Y" increases.
(B) "X" is the level of activity.
In the high-low method, "b" equals change in activity divided by change in costs.
"a" is the fixed component.

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