Burmer CoHas Accumulated Data to Use in Preparing Its Annual Profit

question 39

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.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:
Using regression analysis,what is the estimated maintenance expense for a month that the firm expects to operate 600 machine hours (using 3 decimal places in calculations) ?

• A)$88.
• B)$4,050.
• C)$4,850.
• D)$6,934. $783.778 + ($6.777 x 600)= $4,850

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Definitions:

Discount

In finance, this is the reduction from the face value of a note, bond, or other financial instrument; in commerce, it refers to a reduction from the regular price.

Journal Entry

A documentation of a financial transaction in which the total debits equal the total credits and is entered into the accounting records.

Times Interest Earned Ratio

A financial ratio that compares a company's operating income to its interest expenses, indicating how well it can cover interest payments with earnings before interest and taxes.