Burmer 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. Data regarding the machine hours and maintenance costs for the last year and the results of the regression analysis are as follows:
A staff assistant has run regression analyses on the data and obtained the following output using Excel:
REGRESSION ANALYSIS
Y (Dependent) Variable: Maintenance Cost
X (Independent) Variable: Maintenance Hours
The Lower 95% and Upper 95% shown in the output suggests that:
Definitions:
Extraordinary Loss
A loss resulting from events that are both unusual and infrequent in nature, not expected to recur in the foreseeable future.
Extraordinary Items
Events and transactions that are distinguished by their unusual nature and infrequency, reported separately in financial statements for clearer analysis.
Earnings Per Share
A measure of a company's profitability that calculates how much money shareholders would receive for each share they own if all of the profits were distributed to them.
Component of the Business
A segment or section of a company that can be identified operationally and for financial reporting, often seen as a distinct part of the business that could be separated or sold.
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