Question number 1 :

The Armer Company is accumulating data to be used 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 that linear regression be employed to derive an equation in the form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for last year and the results of the regression analysis are as follows:

	Hours of Activity		Maintenance Costs
January	490		$ 4,200
February	340		3,200
March	390		3,700
April	280		2,760
May	480		4,390
June	290		2,850
July	300		3,000
August	500		4,640
September	470		4,170
October	480		4,080
November	330		3,500
December	330		3,000
Sum	4,680		43,490
Average	390		3,624

A coefficient			776.61
B coefficient			7.3014
Standard error of the a cofficient	226.207
Standard error of the a cofficient	0.56703
Standard error of the estimate			164.926
R2			0.94312
T-value a			3.433
T-value b			12.877

Using the high-low method to estimate cost behavior, 500 maintenance hours in a month would mean the maintenance costs would be budgeted

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Question number 2:

The Armer Company is accumulating data to be used 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 that linear regression be employed to derive an equation in the form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for last year and the results of the regression analysis are as follows:

	Hours of Activity		Maintenance Costs
January	460		$ 4,300
February	310		2,700
March	450		3,700
April	300		3,070
May	510		4,500
June	330		3,120
July	330		3,230
August	470		4,070
September	500		4,440
October	430		3,880
November	390		3,700
December	360		3,280
Sum	4,840		43,990
Average	403		3,666

A coefficient			653.76
B coefficient			7.4680
Standard error of the a cofficient	278.906
Standard error of the a cofficient	0.68053
Standard error of the estimate			171.443
R2			0.92333
T-value a			2.344
T-value b			10.974

What is the variable cost per hour using the high-low method to estimate the cost equation?

Question number 3:The Chambers Manufacturing Company recorded overhead costs of $16,091 at an activity level of 4,950 machine hours and $9,812 at 2,250 machine hours. The records also indicated that overhead of $10,050 was incurred at 2,975 machine hours. What is the variable cost per machine hour using the high-low method to estimate the cost?.

Question number 4:

The cost accountants at the Doering Company regressed total overhead costs and direct labor hours for the past 30-months and reported the following results:

Slope	=	$ 36.68
Intercept	=	$530.03
Correlation coefficient	=	0.830

What is the estimated overhead cost if 203 direct labor hours are expected to be used in the upcoming period?