Fact Pattern: Armer Company is accumulating data to be used 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 that linear regression be employed to derive an equation in the form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for last year and the results of the regression analysis are as follows: Hours of Activity Maintenance Costs January 480 $ 4,200 February 320 3,000 March 3,600 April 300 2,820 May 500 4,350 July 320 3,030 August 520 4.470 September 490 4,260 October 470 4,050 November 350 3,300 December 340 3,160 Sum 4,800 $43,200 Average 400 3,600 Average cost per hour (43,200 + 4,800) = $9 a coefficient 684.65 b coefficient 7.2884 Standard error of the a coefficient 49.515 Standard error of the b coefficient .12126 Standard error of the estimate 34.469 .99724 t-value a 13.827 t-value b 60.105 Single-Tailed Values oft Degrees of Freedom 1 100 tos 1025 8 400 101 2.90 231 1.40 1.38 1.86 1.83 2.26 2.82 1.37 181 180 2.23 2 20 1.36 1.36 1.35 1.78 1.77 2.76 2.72 2.68 2.65 2.62 2.18 2.16 2.15 13 14 1.36 176 The percentage of the total variance that can be explained by the regression equation is A. 12.126% B. 99.862% O C. 99.724% D. 69.613%