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:

Month	Maintenance Cost			Machine Hours
Jan.	$	4,450			580
Feb.		3,250			420
Mar.		3,850			500
Apr.		3,070			400
May		4,600			600
June		3,210			410
July		3,280			420
Aug.		4,720			620
Sept.		4,510			590
Oct.		4,300			570
Nov.		3,550			450
Dec.		3,410			440
Sum	$	46,200			6,000
Average	$	3,850		$	500
Average cost per hour				$	8.00
a (intercept)				$	205.82
b (coefficient)					7.2884
Standard error of the estimate					34.469
R-squared					0.99724
t-value for b					60.1050

At 400 hours of activity, Armer management can be approximately two-thirds confident that the maintenance costs will be in the range of

Multiple Choice

• $3,059.74 to $3,182.62.

• $3,060.72 to $3,181.61.

• $3,095.43 to $3,147.05.

• $3,086.71 to $3,155.65.

• None of these answer choices are correct.