Wilkens Company

Wilkens Company wants to determine the cost behavior pattern of maintenance costs. Wilkens has decided to use linear regression by employing the equation y = a + bx for maintenance costs. The prior year's data regarding maintenance hours and costs, are given in the data below.

1a. Solve for A and B variable provide the graph (scatter gram) show trend line, formula, and R-Squared.

A
B
"R-SQUARED"

1b. Refer to the Wilkens Company. Based upon the data derived from the regression analysis, what maintenance costs should be budgeted for a month in which 485 maintenance hours will be worked?

1c. Refer to the Wilkens Company. What is the percentage of the total variance that can be explained by the regression equation?

1d. What is meant by cost behavior? Explain how it relates to the following terms: fixed, variable, and mixed cost.