Armer Company Is Accumulating Data to Use in Preparing Its

question 29

Multiple Choice

Armer Company is accumulating data to use 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 the use of linear regression 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 follow: If Armer Company uses the high-low method of analysis, the equation for the relationship between hours of activity and maintenance cost follows:

• A) y = 400 + 9.0x
• B) y = 570 + 7.5x
• C) y = 3,600 + 400x
• D) y = 570 + 9.0x
• E) None of these answer choices are correct.

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Definitions:

Appetite

The natural desire to satisfy bodily needs for food, influenced by psychological, physiological, and environmental factors.

Self-Confidence

One's belief in their own abilities or judgment, enabling them to face new challenges or undertake tasks.

Disinhibitor

An agent or factor that reduces inhibition, leading to the expression of behaviors normally suppressed.

Aggressive Behavior

Actions that are initiated with the intent to cause harm or injury to another person or to destroy property.