Midgett Co

question 84

Multiple Choice

Midgett Co. has accumulated data to use in preparing its annual profit plan for the upcoming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff suggested that linear regression be employed to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis are as follows:Average cost per hour ($51,840/6,270) = $8.27 (rounded to the nearest cent)
r = 0.99743
r² = 0.99487
Using the high-low method, total monthly fixed cost is calculated to be (round to nearest dollar) :

• A) $757.
• B) $687.
• C) $756.
• D) $733.
• E) $717.

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Definitions:

Acetone

A volatile, colorless liquid used as a solvent and an antiseptic; it is the simplest and smallest ketone.

Ethyl Acetoacetate

An organic compound used as a reagent in the synthesis of various compounds, characterized by the presence of both ester and keto functional groups.

Sodium Ethoxide

A strongly basic compound formed from the reaction of ethanol and sodium, used as a nucleophile in organic synthesis.

Dilute Acid

An acid solution that has a low concentration of acid in a large amount of solvent, typically water.