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.	$5,040	620
Feb.	3,648	420
Mar.	4,320	520
Apr.	3,331	390
May	5,221	650
June	3,550	400
July	3,655	430
Aug.	5,365	690
Sept.	5,110	640
Oct.	4,866	610
Nov.	3,944	460
Dec.	3,790	440
Sum	$51,840	6,270
Average	$4,320.00	522.50

Average cost per hour ($51,840 6,270) = $8.27 (rounded to the nearest cent) r = .99821 r² = .99780 Using the high-low method, unit variable cost is calculated to be (round to the nearest cent):

$6.83.

$8.67.

$6.78.

$7.88.

$6.48.