Toronto Company makes cell phones. The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory. Data for the past four months were collected.Coefficients shown by a regression program are:
$\begin{array}{lrr}& \text { Electricity } & \text { Machine } \
\text { Month } & \text { cost } & \text { hours }\
\text { May } & \$ 7,560 & 570 \
\text { June } & 8,220 & 625 \
\text { July } & 7,480 & 546 \
\text { August } & 7,186 & 518
\end{array}$ $\begin{array}{ll}
\text { Intercept } & 2,225 \
\text { X Variable 1 } & 9.75
\end{array}$
-Refer to the Figure.Assume that 640 machine hours are budgeted.What would be the total budgeted cost for electricity next month?
A)$2,225
B)$4,015
C)$6,240
D)$8,465

Question

Toronto Company makes cell phones. The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory. Data for the past four months were collected.Coefficients shown by a regression program are:
 $\begin{array}{lrr}& \text { Electricity } & \text { Machine } \
\text { Month } & \text { cost } & \text { hours }\
\text { May } & \$ 7,560 & 570 \
\text { June } & 8,220 & 625 \
\text { July } & 7,480 & 546 \
\text { August } & 7,186 & 518
\end{array}$ $\begin{array}{ll}
\text { Intercept } & 2,225 \
\text { X Variable 1 } & 9.75
\end{array}$
-Refer to the Figure.Assume that 640 machine hours are budgeted.What would be the total budgeted cost for electricity next month?
A)$2,225
B)$4,015
C)$6,240
D)$8,465

Quizplus · Accepted Answer

The total budgeted cost for electricity next month can be calculated using the regression equation given by the intercept and the coefficient for the X variable (machine hours). The equation is: Total Cost = Intercept + (Coefficient * Machine Hours). Plugging in the values: Total Cost = 2,225 + (9.75 * 640) = 2,225 + 6,240 = 8,465.

Toronto Company Makes Cell Phones Intercept 2,225 X Variable 1 9.75\begin{array}{ll}\text { Intercept } & 2,225 \\\text { X Variable 1 } & 9.75\end{array} Intercept X Variable 1 ​2,2259.75​

Toronto Company Makes Cell Phones $\begin{array}{ll}\text { Intercept } & 2,225 \\\text { X Variable 1 } & 9.75\end{array}$