Question

LO 2.3In the cost equation Y = a + bx, Y represents which of the following?

Answer 1

Answer:

total costs

Explanation:

The cost equation Y = a + bx represents the mixed cost which includes both fixed and variable components

The explanation of the cost equation is shown below:

Y = a + bx

where

Y = Total cost

a = Fixed cost

b = variable rate per unit for an activity

X = number of units in an activity

So, this cost equation is referred to the mixed cost which considers both types of cost i.e fixed cost and the variable cost