Recent Maintenance Costs of Divers Corporation Are Listed Below Management Believes That Maintenance Cost Is a Mixed Cost That

question 43

Multiple Choice

Recent maintenance costs of Divers Corporation are listed below: $\begin{array}{lcc} & \begin{array}{c}\text { Machine- } \\\text { Hours }\end{array} & \begin{array}{c}\text { Maintenance } \\\text { Costs }\end{array} \\\text { February } & 527 & \$ 5,144 \\\text { March } & 499 & \$ 5,033 \\\text { April } & 542 & \$ 5,220 \\\text { May } & 541 & \$ 5,196 \\\text { June } & 489 & \$ 4,973 \\\text { July } & 543 & \$ 5,200 \\\text { August } & 558 & \$ 5,288 \\\text { September } & 513 & \$ 5,060\end{array}$ 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) $5,139
• B) $2,806
• C) $4,973
• D) $2,738

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