5.

Para Company developed a data set that contained a measure of total cost at various levels of activity. Para then used regression analysis to determine the intercept an slope of a line running through the data set. Based on this information, which of the following statements is true regarding the estimates related to the intercept and the slope.

The intercept represents the total variable cost and the slope represents the total fixed cost per unit.

The intercept represents the total fixed cost and the slope represents the variable cost per unit.

The intercept represents the total variable cost and the slope represents the fixed cost per unit.

The intercept represents the variable cost per unit and the slope represents the fixed cost per unit.

6.

Which of the following statements is false?

A visual scatter graph is more precise than regression analysis when drawing a line that best fits a data set.

All of the statements are false.

The R Square produced in regression analysis represents the estimated variable cost per unit.

The high/low method is the most accurate method of estimating fixed and variable cost.

Handy Hiking produces backpacks. In 2005, its highest and lowest production levels occurred in July and January, respectively. In July, it produced 4,000 backpacks at a total cost of $110,000, In January, it produced 2,500 backpacks at a total cost of$87.500. Using the high/low method, the total estimated fixed cost was O $50,000 O None of the answers is correct. O $60,000 O $110,000 References eBook & Resources Multiple Choice Learning objective: 02-06 Use the high- low method, scattergraphs, and regression analysis to estimate fixed and variable costs. Ask you instructor a uestio 1.25 points Which of the following statements regarding scatter graphs is true? O scatter graph analysis may rely on visual judgment to draw a line that follows a linear path through the plotted points in a data set. O Scatter graph analysis may be used to assess the accuracy of the highMow method of estimating fixed and variable costs. O Scatter graph analysis may be used in conjunction with the highMow method. and regression analysis as means of estimating variable and fixed costs. O All of the statements regarding scatter graphs are true. Required information