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 variable component of maintenance cost per machine-hour is closest to:
A) $9.76
B) $6.00
C) $4.43
D) $4.57

Question

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 variable component of maintenance cost per machine-hour is closest to:
A) $9.76 
B) $6.00 
C) $4.43 
D) $4.57

Quizplus · Accepted Answer

Using Microsoft Excel functions, the solution is:
Maintenance cost per machine-hour = Slope = $4.43

Recent Maintenance Costs of Divers Corporation Are Listed Below