The Armer Company is accumulating data to be used in preparingits annual profit plan for the coming year. The cost behaviorpattern of the maintenance costs must be determined. The accountingstaff has suggested that linear regression be employed to derive anequation in the form of y = a + bx for maintenance costs. Dataregarding the maintenance hours and costs for last year and theresults of the regression analysis are as follows:
Hours of Activity
Maintenance Costs
January
470
$ 4,400
February
300
2,800
March
430
3,300
April
270
2,860
May
500
4,400
June
300
2,910
July
310
3,070
August
530
4,700
September
500
4,270
October
460
3,970
November
330
3,500
December
330
3,280
Sum
4,730
43,460
Average
394
3,622
Using the high-low method to estimate cost behavior, 400maintenance hours in a month would mean the maintenance costs wouldbe budgeted at: (Round your intermediate calculations and finalanswer to 2 decimal places.)
The Armer Company is accumulating data to be used in preparingits annual profit plan for the coming year. The cost behaviorpattern of the maintenance costs must be determined. The accountingstaff has suggested that linear regression be employed to derive anequation in the form of y = a + bx for maintenance costs. Dataregarding the maintenance hours and costs for last year and theresults of the regression analysis are as follows:
Hours of Activity | Maintenance Costs | ||
January | 470 | $ 4,400 | |
February | 300 | 2,800 | |
March | 430 | 3,300 | |
April | 270 | 2,860 | |
May | 500 | 4,400 | |
June | 300 | 2,910 | |
July | 310 | 3,070 | |
August | 530 | 4,700 | |
September | 500 | 4,270 | |
October | 460 | 3,970 | |
November | 330 | 3,500 | |
December | 330 | 3,280 | |
Sum | 4,730 | 43,460 | |
Average | 394 | 3,622 |
Using the high-low method to estimate cost behavior, 400maintenance hours in a month would mean the maintenance costs wouldbe budgeted at: (Round your intermediate calculations and finalanswer to 2 decimal places.) |
Related questions
The Armer Company is accumulating data to be used in preparingits annual profit plan for the coming year. The cost behaviorpattern of the maintenance costs must be determined. The accountingstaff has suggested that linear regression be employed to derive anequation in the form of y = a + bx for maintenance costs. Dataregarding the maintenance hours and costs for last year and theresults of the regression analysis are as follows:
| Hours ofActivity | 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 | ||
| Acoefficient | 246.88 | |||
| Bcoefficient | 8.0699 | |||
| Standard error of the a cofficient | 556.244 | |||
| Standard error of the a cofficient | 1.31938 | |||
| Standard error of the estimate | 360.101 | |||
| R2 | 0.78908 | |||
| T-value a | .444 | |||
| T-value b | 6.116 | |||
Based upon the data derived from the regression analysis, 420maintenance hours in a month would mean the maintenance costs wouldbe budgeted at: (rounded to the nearest whole dollar) |
