Write a linear cost function equation for each of the following conditions. Use y for estimated costs and X for activity of the cost driver
a. Direct manufacturing labor is $10 per hour.
b. Direct materials cost $15.60 per cubic yard.
c. Utilities have a minimum charge of $5,000, plus a charge of $0.30 per kilowatt-hour.
d. Machine operating costs include $300,000 of machine depreciation per year, plus $100 of utility costs for each day the machinery is in operation.
Answer:
a. y = $10X
b. y = $15.60X
c. y = $5,000 + $0.30X
d. y = $300,000 + $100 X
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