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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

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. $ 4,550 620
Feb. 3,350 460
Mar. 3,950 540
Apr. 3,170 440
May 4,700 640
June 3,310 450
July 3,380 460
Aug. 4,820 680
Sept. 4,610 630
Oct. 4,400 610
Nov. 3,650 490
Dec. 3,510 480
Sum $ 47,400 6,500
Average $ 3,950 $ 542
Average cost per hour $ 7.00
a (intercept) $ 129.7693
b (coefficient) 7.0527
Standard error of the estimate 52.8466
R-squared 0.9935
t-value for b 39.130

The percent of the total variance that can be explained by the regression equation is

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