Question
Estimating a cost function. The controller of the Javier Company is preparing the budget for 2018 and needs to estimate a cost function for delivery
Estimating a cost function. The controller of the Javier Company is preparing the budget for 2018 and needs to estimate a cost function for delivery costs. Information regarding delivery costs incurred in the prior two months are:
| Month | Miles Driven | Delivery Costs |
| August | 11,600 | $10,000 |
| September | 18,000 | $13,200 |
Required:
1. Estimate the cost function for delivery.
2. Can the constant in the cost function be used as an estimate of fixed delivery cost per month? Explain.
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Weygandt Kimmel Kieso
10th Edition
0470646462, 978-0470646465
