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The following computer printout was generated, using regression, for use in estimating overhead costs.

Intercept

5700

X Variable 1

45

Multiple R

0.3000

R Square

0.0900

Activity variable

Direct labour hours

An estimate of costs at an activity level of 100 direct labour hours would be:

Select one:

a.
$12,000


b.
$11,400


c.
$10,200


d.
None of these


e.
$10,600

Respuesta :

abiolataiwo2015

An estimate of costs at an activity level of 100 direct labor hours would be: c.$10,200.

Estimate of costs at an activity level

Total cost = Total fixed cost + Total variable cost

Estimated cost =$5,700 + $45x

Let x represent direct labor hours

Hence:

Estimated cost=$5,700+$45(100)

Estimated cost=$5,700+$4,500

Estimated cost=$10,200

Inconclusion an estimate costs at an activity level of 100 direct labor hours would be: c.$10,200.

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