C14-30. Estimating Machine Repair Costs LO3 In an attempt to determine the best basis for predicting machine repair costs, the production su- pervisor accumulated daily information on these costs and production over a one-month period. Applying simple regression analysis to the data, she obtained the following estimating equation: Y = $800 - $2.60X where YE = total daily machine repair costs X = daily production in units Because of the negative relationship between repair costs and production, she was somewhat skep- tical of the results, even though the R-squared was a respectable 0.765. REQUIRED a. What is the most likely explanation of the negative variable costs? b. Suggest an alternative procedure for estimating machine repair costs that might prove more useful. Latimation LO4 LO3, 4 P15-34. CVP Analysis Using Published Financial Statements APL Condensed data in millions of dollars from Apple's 2014 and 2015 income statements follow: 2015 2014 Revenues Total cost of revenues and operating expenses. Operating income... $233,715 (162,485) $ 71,230 $182,795 (130,292) $ 52,503 REQUIRED a. Develop a cost-estimation equation for Apple's annual cost of revenues and operating expenses. b. Determine Apple's annual break-even point. Predict operating profit for 2016, assuming 2016 sales of $284,000 million. d. Identify the assumptions required to use the equations and amounts computed above. c