Figure 3-7.

Margola Company produces hand-held calculators. The company controller wanted to calculate the fixed and variable costs associated with the maintenance cost incurred by the factory. Data for the past four months were collected.

Maintenance

Machine

Monthcost

hours

June$4,180

328

July3,956

310

August4,686

386

September4,240

352

Coefficients shown by a regression program are:

Intercept1,150X Variable 19.06

Refer to Figure 3-7. Using the results of regression, calculate the variable rate of maintenance cost.

a.$1,150 per machine hour

b.$12.14 per machine hour

c.$12.74 per machine hour

d.$9.06 per machine hour