Refer to Toronto Company. What is the variable rate of the electricity cost when using the results of regression?
A) $9.67 per machine hour
B) $9.75 per machine hour
C) $10.25 per machine hour
D) $13.87 per machine hour

Question

Quizplus · Accepted Answer

According to the regression results given in the question, the variable rate coefficient for electricity cost is 0.195, which means that the electricity cost would increase by $0.195 for every additional machine hour used. Thus, multiplying the coefficient by the average machine hours gives us $9.75 per machine hour, which is the variable rate of electricity cost. Therefore, the correct choice is B.