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.	$	4,850			740
Feb.		3,650			580
Mar.		4,250			660
Apr.		3,470			560
May		5,000			760
June		3,610			570
July		3,680			580
Aug.		5,120			840
Sept.		4,910			750
Oct.		4,700			730
Nov.		3,950			610
Dec.		3,810			600
Sum	$	51,000			7,980
Average	$	4,250		$	665
Average cost per hour				$	6.00
a (intercept)				$	78.24
b (coefficient)					6.5086
Standard error of the estimate					114.594
R-squared					0.96949
t-value for b					17.8260

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

• $2,280.15 to $2,770.25.

• $2,281.10 to $2,769.27.

• $2,395.96 to $2,654.56.

• $2,410.61 to $2,639.79.

• None of these answer choices are correct.