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 + bx 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) 
What would be the cost equation if regression analysis is used?
A. Maintenance Costs = $34.469 + ($0.99724 × Hours of Activity).
B. Maintenance Costs = $684.65 + ($49.515 × Hours of Activity).
C. Maintenance Costs = $684.65 + ($7.2884 × Hours of Activity).
D. Maintenance Costs = $7.2884 + ($684.65 × Hours of Activity).
Answer: C
You might also like to view...
If a company purchases treasury stock for $6,000 and then reissues it for $5,000, the difference of $1,000 is
a. treated as a gain on the sale. b. treated as a loss on the sale. c. an increase in stockholders' equity. d. a decrease in stockholders' equity.
During the ____________ revolution in the 1950s, the government nationalized foreign-owned property without compensation.
Fill in the blank(s) with the appropriate word(s).
How does the problem recognition stage of the business buying decision process differ for straight rebuys and new-task buys?
What will be an ideal response?
Recording a credit to all owner's equity accounts will increase the account
Indicate whether the statement is true or false