(Appendix 5A) Recent maintenance costs of Divers Corporation are listed below:
Management believes that maintenance cost is a mixed cost that depends on machine-hours.
-Using the least-squares regression method,the estimate of the fixed component of maintenance cost per month is closest to:
A) $5,139
B) $2,806
C) $4,973
D) $2,738

Question

(Appendix 5A) Recent maintenance costs of Divers Corporation are listed below:
  Management believes that maintenance cost is a mixed cost that depends on machine-hours.
-Using the least-squares regression method,the estimate of the fixed component of maintenance cost per month is closest to:
A) $5,139 
B) $2,806 
C) $4,973 
D) $2,738

Quizplus · Accepted Answer

Using Microsoft Excel functions, the solution is:
Fixed maintenance cost per month = Intercept = $2,806

(Appendix 5A) Recent Maintenance Costs of Divers Corporation Are Listed