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The College of Business at Northeast College is accumulating data as a first step in the preparation of next year's budget development. One cost that

The College of Business at Northeast College is accumulating data as a first step in the preparation of next year's budget development. One cost that is being looked at closely is administrative costs as a function of student credit hours. Data on administrative costs and credit hours for the past thirteen months are shown below:

Month Administrative Costs Credit Hours
July $ 129,301 250
August 82,613 115
September 225,580 1,392
October 216,394 1,000
November 258,263 1,309
December 184,449 1,112
January 219,137 1,339
February 245,000 1,373
March 209,462 1,064
April 191,925 1,123
May 249,978 1,360
June 170,418 420
July 128,167 315
Total $ 2,510,687 12,172
Average $ 193,130 936

The controller's office has analyzed the data and has given you the results from the regression analysis:

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.9317157
R Square 0.868094147
Adjusted R Square 0.856102705
Standard Error 20,134.92395
Observations 13

ANOVA
df SS MS F Significance F
Regression 1 29,349,143,514 29,349,143,514 72.3928117 3.61909E-06
Residual 11 4,459,566,787 405,415,162.4
Total 12 33,808,710,301

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 96,647.02398 12,641.66539 7.64511803 1.00291E-05 68,822.90608 124,471.1419 68,822.90608 124,471.1419
X Variable 1 103.0607697 12.11283103 8.508396541 3.61909E-06 76.40060833 129.720931 76.40060833 129.720931

If the controller uses the high-low method to estimate costs, the fixed cost portion of the cost equation for administrative salaries is:

$198,808.

$69,731.68.

$96,409.42.

$19,943.58

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