The management of Hamano Corporation would like for you to analyze their repair costs, which are listed below: Machine-HoursRepair CostsApril4,459 $98,523May4,426 $98,296June4,493 $98,781July4,417 $98,207August4,432 $98,349September4,446 $98,420October4,489 $98,749November4,475 $98,654 Management believes that repair cost is a mixed cost that depends on the number of machine-hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to:
A. $8.19 per machine-hour plus $62,015 per month
B. $7.55 per machine-hour plus $64,859 per month
C. $22.11 per machine-hour plus $98,497 per month
D. $7.37 per machine-hour plus $65,670 per month
Answer: D
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