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 the high-low method is used?
A) Maintenance Costs = 9.00 × Hours of Activity.
B) Maintenance Costs = 3,600 + 400 × Hours of Activity.
C) Maintenance Costs = 570 + 7.50 × Hours of Activity.
D) Maintenance Costs = 34.469 + .99724 × Hours of Activity.
Correct Answer:
Verified
Q47: The Crater Manufacturing Company recorded overhead costs
Q49: Brewsky's is a chain of micro-breweries.Managers
Q50: The Macon Company uses the high-low
Q51: Brewsky's is a chain of micro-breweries.Managers
Q53: The McGraw Company is accumulating data to
Q55: Fromme's Frocks has the following machine
Q56: The McGraw Company is accumulating data to
Q57: The controller of Fortnight Co.has requested
Q58: The McGraw Company is accumulating data to
Q59: The Missou Manufacturing Company recorded overhead costs
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents