Measuring Cost Behavior

Month                         SetupHours(X)                   Setup Costs (Y)

January                              100                                       $1,000

February                            200                                       1,250   

March                                300                                        2,250          

April                                  400                                        2,500          

May                                   500                                         3,750

What is the variable cost per unit using least-squaresregression?

A. $4.50

B. $6.75

C. $7.25

D. $8.95

What is the fixed cost using least-squares regression?

A. $100

B. $105

C. $125

D. $135

What is the total cost at a level of 800 setup hours usingleast-squares regression?

A. $4,235

B. $4,765

C. $4,985

D. $5,525