Burmer CoHas Accumulated Data to Use in Preparing Its Annual Profit

question 37

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,unit variable cost is calculated to be (round to the nearest cent) :

• A)$6.83.
• B)$8.67.
• C)$6.78.
• D)$7.88.
• E)$6.48.

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Definitions:

Minutes

Official records documenting the discussions, decisions, and actions taken during a meeting.

Miles Per Hour

A unit of speed measurement used to express the number of miles traveled in one hour.

Miles Apart

A measurement of distance separating two points or locations, expressed in miles.

Moving

The act of changing one's residence or business location.