Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow:

Month	Machine Hours	Electricity Costs
January	2,500	$	18,400
February	2,900		21,000
March	1,900		13,500
April	3,100		23,000
May	3,800		28,250
June	3,300		22,000
July	4,100		24,750
August	3,500		22,750
September	2,000		15,500
October	3,700		26,000
November	4,700		31,000
December	4,200		27,750

Summary Output
Regression Statistics
Multiple R	0.965
R Square	0.932
Adjusted R2	0.925
Standard Error	1,425.18
Observations	12.00

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	3,726.88	1,682.82	2.21	0.05	(22.69)	7,476.45
Machine Hours	5.77	0.49	11.7	0.00	4.67	6.87

If the controller uses the high-low method to estimate costs, the variable cost per machine hour is:

Multiple Choice

• $11.70.

• $6.90.

• $5.77.

• $6.25.