11. Sofia Smith uses gas to heat her home.She has accumulated the following information regarding her monthly gas bill and monthly heating degree-days. The heating degree-days value for a month is found by first subtracting the average temperature for each day from 65 degrees and then summing these daily amounts together for the month.

Month

Heating Degree-Days

Gas Bill

February

850

$129

April

300

$52

The equation representing the relationship between the gas bill (Y) and heating degree-days (X) is:

A)Y = $0.14

B)Y = $10 + $0.14X

C)Y = $10 - $0.14X

D)Y = $60 + $0.14X

12. The Mayfield Delivery Service has the following information about its truck fleet miles and operating costs:

Year

Miles

Operating Costs

2018

125,000

$80,000

2019

150,000

$87,500

2020

175,000

$105,000

What is the best estimate of fixed costs for fleet operating expenses in 2020 using the high-low method?

A)$50,000

B)$17,000

C)$17,500

D)$25,000

E)None of the above

13. The Kentucky Tools Machine Shop wants to develop a cost estimating equation for its monthly cost of electricity. It has the following data:

Month

Cost of Electricity (Y)

Direct Labor-Hours (X)

January

$7,000

750

April

$7,500

850

July

$8,500

1,000

October

$7,250

800

What would be the best equation using the high-low method?

A)Y = $2,000 + $4X

B)Y = $2,500 + $6X

C)Y = $1,500 + $8X

D)Y = $500 + $6X

14. The following information pertains to Mark Company's weekly activity and total costs:

Volume of Activity

Total Cost

55 units

$600

60 units

$750

80 units

$800

What are Mark's weekly fixed costs?

A)$ -0-

B)$150

C)$160

D)$800

15. The following procedure performed by a dairy is the best example of a unit level activity within a manufacturing cost hierarchy:

A)Delivering dairy products to a grocery store

B)Installing new equipment

C)Homogenizing milk in specially designed tanks

D)Receiving milk from farms

E)None of the above