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XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH),
XYZ Company's accountant is estimating next period's total overhead costs (Y). She performed three regression analyses, the first is based on direct labor hours (DLH), the second is based on machine hours (hr), and the third is based on quantity produced (O). The results were: [Y=$150,000 + $10XDLH; R-square= 0.11); [Y= $190,000 + $5xMhr, R-square= 0.52); [Y-200,000+2Q; R-square:0.95). Based on this information, which cost driver do you recommend? Select one a Quantity produced (Q) b. All cost drivers are the same c. Direct labor hours (DLH) d. None of them e Machine hours (Min) 4 The break-even point is that level of activity where: 101 Select one: a variable cost equals fixed cost. b. sales revenue equals foed cost. c. contribution margin equals foxed cost. d. total contribution margin equals the sum of variable cost plus fixed cost. e sales revenue equals total variable cost. 15
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