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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 Cost
Armer Company is accumulating data to use in preparing its annual profit plan for the coming year. The cost behavior pattern of the Maintenance Cost Machine Hours Month Januar Februar March April Ma June Ju August September October November December Sum Average $4,360 $3,100 $3,730 $2,895 $4,507 $3,054 $3,110 $4,661 $4,387 $4,240 $3,440 $3,268 $44,752 $3,729 497 331 420 310 510 320 332 528 524 482 361 352 4,967 414 Average cost per hour a (intercept b (coefficient) Standard error of the estimate R-squared t-value for b $9.01 $653.18 $7.43 73.7862 9886 29.4992 At 420 hours of activity, Armer management can be approximately two-thirds confident that the maintenance costs will be in the range of $4,701 to $4,848 $3,201 to $4,348 $3,701 to $3,848 $2,701 to $4,848 None of the above
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