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.

---

Definitions:

Marginal Rate

The rate at which one quantity changes with respect to a small change in another quantity.

Transformation

The process of changing from one state or condition to another, often used to describe changes in economic structures or industries.

Absolute Value

The distance of a number from zero on the number line, without considering direction.

OLED TVs

A type of television screen technology that uses organic light-emitting diodes to produce images, known for their high quality in terms of color and brightness.