COMMERCE 2AB3 Lecture Notes - Lecture 19: Fixed Cost, Cost Driver, Variable Cost
Ch 10: Homework Practice
1. High-low and regression cost estimation methods are alike in that they both:
a. have an intercept term and a slope term
b. have an intercept term but not a slope term
c. have a slope term but not an intercept term
d. use all data points
e. use only a few selected data points
2. An R-squared value that approaches one (1.0) would indicate:
a. an average degree of explanatory power
b. a low degree of explanatory power
c. a high degree of explanatory power
d. the presence of outliers
e. the absence of outliers
3. Nellibell's Café bakes croissants that are sold to local restaurants and grocery stores in the
Columbia, South Carolina area. When 600 croissants are baked, the average cost is $0.70.
When 720 croissants are baked, the average cost is $0.65. What is the total cost when 670
croissants are baked?
a. $568
b. $588
c. $448
d. $532
e. $500
