Multiple Choice

• $3,213.

• $4,406.

• None of these answer choices are correct.

• $4,612.

• $4,594.

TB MC Qu. 8-100 Armer Company is accumulating data to use ... Armer Company is accumulating data to use 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 the use of linear regression 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 follow: Aug. Maintenance Month Cost Machine Hours Jan. $ 4,850 450 Feb. 3,650 340 Mar. 4,250 440 Apr. 3,470 290 May 5,000 480 June 3,610 290 July 3,680 300 5,120 560 Sept. 4,910 480 Oct. 4,700 440 Nov. 3,950 340 Dec. 3,810 350 Sum $51,080 Average $ 4,250 $ 397 Average cost per hour $ 11.00 a (intercept) $1,590.11 b (coefficient) 6.7056 Standard error of the estimate 187.8968 R-squared 0.9180 t-value for b 17.826 4,760 Based on the data derived from the regression analysis, 420 maintenance hours in a month mean that maintenance costs should be budgeted to the nearest dollar at