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The McGraw Company is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the
The McGraw 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 box for maintenance costs. Data regarding the maintenance hours and costs for last year and the results of the regression analysis are as follows: (CMA adapted) January February March April May June July August September October November December Sum Average Hours of Activity 506 346 426 326 526 336 346 546 516 496 376 366 5, 112 426 Maintenance Costs $ 4,460 3,260 3,860 3,080 4.610 3, 220 3,290 4,730 4,520 4,310 3,560 3,420 $ 46,320 3,860 A coefficient B coefficient 755.16 7.2884 Mavi | | 56 What would be the cost equation if regression analysis is used? Multiple Choice 19 Maintenance costs $755.16 ($52.607 Hours of Activity Maintenance costs $72884(575516 Hours of Activity) Maintenance costs $755.16+ ($7.2884 Hours of Activity Maintenance costs $34.469+($0.99724 Hours of Activity
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