When using past data to predict a cost that has fixed and variable components, it is possible

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When using past data to predict a cost that has fixed and variable components, it is possible to have an equation with a negative intercept. Does this mean that at a zero production level, the company will make money on its fixed costs? Explain.

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Fundamentals of Cost Accounting

ISBN: 978-0077398194

3rd Edition

Authors: William Lanen, Shannon Anderson, Michael Maher

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Question Posted: Apr 25, 2012 08:00 AM

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When using past data to predict a cost that has fixed and variable components, it is possible

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It is possible for empirical data to show a negative intercept even ...View the full answer

Fundamentals of Cost Accounting

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