Business, 21.06.2020 02:57, katelynn73

Armer Company is accumulating data to use in preparing its annual profit plan for the coming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff has suggested the use of linear regression to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis follow: Hours of Activity Maintenance Costs
January 440 $3,900
February 320 2,500
March 370 3,000
April 350 2,900
May 550 4,330
June 330 2,710
July 340 3,520
August 470 4,770
September 520 4,230
October 520 4,460
November 380 3,200
December 380 3,550
Sum 4,970 43,070
Average 414 3,589

A coefficient 246.88
B coefficient 8.0699
Standard error of the a coefficient 556.244
Standard error of the a coefficient 1.31938
Standard error of the estimate 360.101
R^2 0.78908
T-value a .444
T-value b 6.116
What is the variable cost per hour using the high-low method to estimate the cost equation?
a. $7.96.
b. $8.11.
c. $0.13.
d. $0.12.

Answers: 2

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Armer Company is accumulating data to use in preparing its annual profit plan for the coming year. T...