## (Solution Download) The Armer Company is accumulating data to be used in preparing its annual profit plan for the coming

 The Armer Company is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff has suggested that linear regression be employed to derive an equation in the form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for last year and the results of the regression analysis are as follows:

 Hours of Activity Maintenance Costs January 510 \$ 4,200 February 300 2,900 March 410 3,700 April 290 2,960 May 510 4,330 June 300 2,920 July 300 3,010 August 530 4,630 September 480 4,100 October 480 3,940 November 340 3,200 December 360 3,280 Sum 4,810 43,170 Average 401 3,598

 A coefficient 1,014.92 B coefficient 6.4430 Standard error of the a cofficient 127.220 Standard error of the a cofficient 0.30937 Standard error of the estimate 98.460 R2 0.97746 T-value a 7.978 T-value b 20.826

 Using the high-low method to estimate cost behavior, 410 maintenance hours in a month would mean the maintenance costs would be budgeted at: (Round your intermediate calculations and final answer to 2 decimal places.)

 \$3,902.00. \$3,280.00. \$3,598.00. \$3,795.20.

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