The Rockford Company used regression analysis to predict the annual cost of utilities.The results were as follows: The total fixed cost is ________.
A)$2.037
B)$595
C)$2,500
D)none of the above

Question

The Rockford Company used regression analysis to predict the annual cost of utilities.The results were as follows:  The total fixed cost is ________.
A)$2.037 
B)$595 
C)$2,500 
D)none of the above

Quizplus · Accepted Answer

The intercept (or y-intercept) in a regression equation represents the fixed cost or the cost that does not vary with the changes in the independent variable. In the given regression equation, the intercept value is $2,500 which represents the fixed cost. Therefore, the best choice is C. The other choices are incorrect as they do not represent the fixed cost value in the given regression equation.

The Rockford Company Used Regression Analysis to Predict the Annual