Burmer CoHas Accumulated Data to Use in Preparing Its Annual Profit

question 28

Multiple Choice

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.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 ($51,830 / 6,260) = $8.28 (rounded to the nearest cent) r = .99821 r²= .99642
Using the high-low method,total monthly fixed cost is calculated to be (rounded) :

• A)$757.
• B)$854.
• C)$752.
• D)$784.
• E)$716.

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