The management of Smoots Corporation would like for you to analyze their repair costs, which are listed below:
Management believes that repair cost is a mixed cost that depends on the number of machine-hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to:
A) $4.64 per machine-hour plus $34,603 per month
B) $2.09 per machine-hour plus $19,018 per month
C) $2.79 per machine-hour plus $13,787 per month
D) $2.00 per machine-hour plus $19,649 per month

Question

The management of Smoots Corporation would like for you to analyze their repair costs, which are listed below: 
Management believes that repair cost is a mixed cost that depends on the number of machine-hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to:
A) $4.64 per machine-hour plus $34,603 per month 
B) $2.09 per machine-hour plus $19,018 per month 
C) $2.79 per machine-hour plus $13,787 per month 
D) $2.00 per machine-hour plus $19,649 per month

Quizplus · Accepted Answer

The Answer of The management of Smoots Corporation would like for you to analyze their repair costs, which are listed below: 
Management believes that repair cost is a mixed cost that depends on the number of machine-hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to:
A) $4.64 per machine-hour plus $34,603 per month 
B) $2.09 per machine-hour plus $19,018 per month 
C) $2.79 per machine-hour plus $13,787 per month 
D) $2.00 per machine-hour plus $19,649 per month

The Management of Smoots Corporation Would Like for You to Analyze