19 011339 The McGraw Company is accumulating data to be used 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 that linear regression be employed to derive an equation in the form of ya+ bx for maintenance costs. Data regarding the maintenance hours and costs for last year and the results of the regression analysis are as follows: (CMA adapted) Hours of Activity Maintenance Costs January February March April Hay June 640 $ 4,320 400 3,120 520 3,720 360 2,940 630 4,470 410 3,080 July 400 3,150 August 660 4,590 September 610 4,380 October 590 4,170 Novenber 460 3,420 December 440 3,280 Sum 6,120 $ 44,640 Average 510 3,720 A coefficient 851.25 14 Mc Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been colected and a regression analysis prepared using Excel. The monthly data and the regression output follow Electricity Machine Month Hours Costs 013334 January 2,900 19,400 February 3,300 23,000 March 2,300 14,500 April 3,500 25,000 May 4,2001 29,250 June 3,700 24,000 July 4,500 25,750 August 3,900 23,750 September 2,400 17,500 October 4,100 28,000 November 5,400 33,000 December 5,000 28,750 Summary Output Regression Statistion Multiple R. 0.945 R Square 0.892 Adjusted R2 0.882 12 Your company hired a recent University of lowa college graduate, John Gronen. Can you assist John and complete the following statement. Differential costs are: (CMA adapted) Mutiple Choi a cost common to wil the chokes in the question and wet cery wiecie to any of them a cost the continues to be cured in the absence of activity the difference to costs that resus from sing one dad of erober care is the pet that cel be changed by prej