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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 must be
The McGraw Company is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern must be determined. The accounting staff has suggested that linear regression be employed to derive an equation in the form of y=a 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 570 480 600 440 750 490 480 Maintenance Costs 4,400 3,200 3,800 3,020 4,550 3,160 3,230 4,670 4,460 4,250 3,500 3,360 45,600 3,800 780 730 700 540 520 7,080 590 922.07 4.8778 A coefficient B coefficient Standard error of the a coefficient Standard error of the b coefficient 352.891 0.58712 e to search ter 5 Saved 4.8778 352.891 0.58712 B coefficient Standard error of the a coefficient Standard error of the b coefficient Standard error of the estimate R2 T-value a T-value b 233.376 0.87346 2.613 8.308 Using the high-low method to estimate cost behavior. 470 maintenance hours in a month would mean the maintenance costs would be budgeted at Multiple Choice 0 $2,900 o O $3.210 o $3,166 Prev 1 of 17 # Next > e here to search 11711 LLLLL
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