Repair cost behavior. The Baiman Company analyzed repair costs by month using linear regression analysis. The equation fit took the following form:

Average monthly repair costs have been $18,800, and machine hours used have averaged 1,600 hours per month. Management worries about the ability of the analyst who carried out this work because of the negative coefficient for variable cost.
What is your evaluation of these results?

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Total Fixed Repair= + Costs Costs Variable Repair Costs per Machine Hour Used X During Month Machine Hours Actually Used During Month TRC=a+bx. The results were TRC $20,000 $0.75x