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:

Corporate Form

A legal structure for businesses that is recognized as a separate legal entity from its owners, providing liability protection and other benefits.

Duties

Responsibilities or obligations required by one's role, job, or by law.

Incorporation

The process of legally declaring a business as a corporation, allowing it to operate as a separate legal entity from its owners.

Sole Proprietorship

An individual carrying on business alone.