Midgett Co. has accumulated data to use in preparing its annual profit plan for the upcoming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff suggested that linear regression be employed to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis are as follows:

Month	Maintenance Cost				Machine Hours
Jan.	$	5,050				720
Feb.		3,649				430
Mar.		4,260				580
Apr.		3,351				420
May		5,212				730
June		3,650				330
July		3,633				350
Aug.		5,351				600
Sept.		5,107				630
Oct.		4,854				690
Nov.		3,949				420
Dec.		3,970				350
Sum	$	52,036				6,250
Average	$	4,336.33				520.83

Average cost per hour ($52,036/6,250) = $8.33

r = 0.88539

r² = 0.78392

Using the high-low method, total monthly fixed cost is calculated to be: (Do not round intermediate calculations. Round your answer to the nearest dollar.)

Multiple Choice

• $1,771.

• $1,701.

• $1,770.

• $1,747.

• $1,731.