Recent maintenance costs of Prideaux 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 fixed component of maintenance cost per month is closest to:
A)$2,859
B)$8,241
C)$8,550
D)$2,782

Question

Recent maintenance costs of Prideaux 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 fixed component of maintenance cost per month is closest to:
A)$2,859 
B)$8,241 
C)$8,550 
D)$2,782

Quizplus · Accepted Answer

Using Microsoft Excel functions,the solution is:
Fixed maintenance cost per month = Intercept = $2,782

Recent Maintenance Costs of Prideaux Corporation Are Listed Below