The Saskatoon Company manufactures motorcycles. The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory. Data for the past five months were collected. $\begin{array}{lrr}& \text { Utility } & \text { Machine } \\text { Month } &\text { cost }&\text { hours }\
\text { March } & \$ 30,255 & 2,200 \
\text { April } & 32,750 & 2,525 \
\text { May } & 34,712 & 2,710 \
\text { June } & 31,850 & 2,410 \
\text { July } & 30,720 & 2,290
\end{array}$
-Refer to the Figure.When using a linear regression program,what is the value of the intercept (rounded to the nearest penny)?
A)$0.99
B)$195.35
C)$10,630.80
D)$190,267.00

Question

Quizplus · Accepted Answer

The intercept in a linear regression model represents the fixed cost when the variable (machine hours in this case) is zero. Given the data, a linear regression would calculate the fixed component of the utility cost, which is the intercept of the regression line.

The Saskatoon Company Manufactures Motorcycles -Refer to the Figure