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Martin Company makes cell phones. The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory. Data for

Martin Company makes cell phones. The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory. Data for the past four months were collected.

Electricity

Machine

Month

cost

hours

January

$7,560

570

February

8,220

625

March

7,480

546

April

7,186

518

Coefficients shown by a regression program are:

Intercept

2,255

X Variable 1

9.48

Using the results of regression, the cost formula for electricity cost was

a.

$9.48 machine hours

b.

$2,255 machine hours

c.

$2,255 + ($9.48 machine hours)

d.

None of these are correct.

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