# Financial performance Sample CBT 2 from 2013 - Task 1.5 regression

Rosierabbit
New MemberPosts:

**17**Registered
Hi All can anyone help with the above question please. We are given the following information :

Production cost for MIN2 are semi variable. company uses regress Y = a+bx

Y total cost,

X unit cost

A fixed element

B variable element

Data :

8000 units 52000 total cost

12000 units 72000 total cost

13500 79500 total cost

Use above data to calculate A and B

Answer A is 12000

Answer B is 5

Any help appreciated

Thank you all

Rosie x

Production cost for MIN2 are semi variable. company uses regress Y = a+bx

Y total cost,

X unit cost

A fixed element

B variable element

Data :

8000 units 52000 total cost

12000 units 72000 total cost

13500 79500 total cost

Use above data to calculate A and B

Answer A is 12000

Answer B is 5

Any help appreciated

Thank you all

Rosie x

## Comments

794RegisteredHigh 13,500 unit 79,500 cost

Low 8,000 units 52,000 cost

Diff 5,500 units 27,500 cost. Unit cost (ie variable element) = 5

Then plug that back into any of the known levels of production:

8,000 units x 5 = 40,000 variable

total cost 52,000

so fixed cost is the difference, 12,000

Try it any of the 3 levels of production, it will work