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2 The McGraw Company is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of

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2 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 y **+ bx for maintenance costs. Duts regarding the maintenance hours and costs for last year and the results of the regression analysis are as follows: (CMA adapted 01:56:21 January February March April May June July August September October November December Hours of Activity 480 600 780 560 960 610 600 1.000 930 890 690 660 3,760 Maintenance Costs $ 4,520 3,320 3.920 3,140 4,670 3,280 3.350 4,790 6,500 4,370 3,620 3,680 67.000 3.920 Average 730 Bootiolent Bericiant 2.061.2 2.5662 2.5462 588.733 0.78586 B coefficient Standard error of the a coefficient Standard error of the b coefficient Standard error of the estimate R2 T-value a T-value b 01:57:44 458.233 0.51213 3.501 3.240 What is the variable cost per hout using the high-low method to estimate the cost equation? Multiple Choice 10.0092 2 Multiple Choice 01:57:23 $0.0092 $.62 5.52 $0.0078

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