ECONOMICS

Detailed explanation-1: -The linear equation Y = a + bX is often used to express cost formulas. In this equation: Answers: A) the b term represents variable cost per unit of activity B) the a term represents variable cost in total C) the X term represents total cost D) the Y term represents total fixed cost.

Detailed explanation-2: -Variable Cost Formula. To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you’ve created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units.

Detailed explanation-3: -In order to find the average variable cost (total variable cost per unit produced), you need to sum all the variable costs for a given period and divide by the total number of units made during that period. In other words, you need to divide the total variable cost by the total number of items made.

Detailed explanation-4: -The formula for total variable cost is: y=mx. The y-intercept for a variable cost is always zero because if there is no activity, there is no cost. Therefore, the line will always start at 0, 0. The slope of the line, m, is your variable rate.

Detailed explanation-5: -A linear regression line has an equation of the form Y = a + bX, where X is the explanatory variable and Y is the dependent variable.