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	Maintenance Cost	Machine Hours
January	$ 5,040	560
February	3,666	410
March	4,430	620
April	3,325	290
May	5,210	670
June	3,520	300
July	3,574	350
August	5,382	770
September	5,124	600
October	4,849	560
November	3,942	470
December	3,970	420
Sum	$ 52,032	6,020
Average	$ 4,336.00	501.67

Average cost per hour ($52,032/6,020) = $8.64

r = 0.93799

r² = 0.87983

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

• $2,152.

• $2,082.

• $2,151.

• $2,128.

• $2,112.