Multiple Choice

• 48.248%.

• 59.627%

• 78.358%.

• 78.399%.

• 78.220%.

Pepper Company 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 January February March April May June July August September October November December Maintenance Cost $ 5,050 3,649 4,260 3,326 5,212 3,650 3,633 5,351 5,107 4,854 3,949 3,970 $ 52,011 $ 4,334.25 Machine Hours 720 430 580 420 730 350 350 600 630 690 420 350 Sum 6,270 Average 522.50 Average cost per hour ($52,011/6,270) = $8.30 (rounded to the nearest cent) r=0.88520 r2 = 0.78358 The percent of the total variance that can be explained by the regression equation is