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	2,600	$	18,450
February	3,000	$	21,100
March	2,000	$	13,550
April	3,200	$	23,100
May	3,900	$	28,300
June	3,400	$	22,100
July	4,200	$	24,800
August	3,600	$	22,800
September	2,100	$	15,600
October	3,800	$	26,100
November	4,800	$	31,100
December	4,300	$	27,800

Summary Output
Regression Statistics
Multiple R	0.965
R Square	0.931
Adjusted R2	0.924
Standard Error	1,433.89
Observations	12.00

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	3,227.67	1,741.27	1.85	0.09	(652.13)	7,107.46
Machine Hours	5.77	0.50	11.63	0.00	4.67	6.88

If the controller uses regression analysis to estimate costs, the estimate of the fixed portion of electricity costs is:

Multiple Choice

• Fixed Cost = $5.77.

• Fixed Cost = $1,741.27.

• Fixed Cost = $1,433.89.

• Fixed Cost = $3,227.67.