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What is the significance of the function y = a + bx?
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Answer Posted / bhavani
The function y = a + bx represents the function of a
straight line and is often used by management accountants
when discussing the behaviour of costs. In this
context 'a' represents the total fixed cost in a
situation, 'b' represents the variable costs per
unit and x the number of units. When 'b' is multiplied
by 'x', we obtain the total variable costs.
The function y = a + bx can represent the total costs of an
organisation or department or it can represent a semi
variable cost.
| Is This Answer Correct ? | 53 Yes | 5 No |
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