Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Nations Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firms controller is accumulating data to be used in

Nations Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firms controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firms equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y = a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows:

Month Hours of Maintenance Service Maintenance Costs
January 560 $ 5,520
February 470 4,260
March 260 2,820
April 500 4,280
May 340 2,970
June 460 4,170
July 350 3,060
August 410 3,590
September 470 3,970
October 370 3,290
November 370 3,250
December 350 3,110
Total 4,910 $ 44,290
Average 409 * $ 3,691 *

*Rounded

Compute the predicted maintenance cost at 620 hours of activity.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

5. Describe the relationship between history and identity.

Answered: 1 week ago