Prince Edward Company Produces Hand-Held Calculators $$\begin{array} { l l } \text { Intercept } & 985 \\\text { X Variable 1 } & 9.82\end{array}$$

question 67

Multiple Choice

Prince Edward Company produces hand-held calculators. The company controller wanted to calculate the fixed and variable costs associated with the maintenance cost incurred by the factory. Data for the past four months were collected.Coefficients shown by a regression program are as follows:
$\begin{array}{lrr}& \text { Maintenance } & \text { Machine } \\\text { Month } & \text { cost } & \text { hours }\\\text { March } & \$ 4,180 & 328 \\\text { April } & 3,956 & 310 \\\text { May } & 4,686 & 386 \\\text { June } & 4,240 & 352\end{array}$ $$\begin{array} { l l } \text { Intercept } & 985 \\\text { X Variable 1 } & 9.82\end{array}$$
-Refer to the Figure.Assume that 400 machine hours are budgeted.What would be the budgeted cost for maintenance next month?

• A)$985
• B)$2,943
• C)$3,928
• D)$4,913

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Definitions:

Operating Expense

Ongoing costs for running a product, business, or system, not including the cost of goods sold but encompassing items like salaries and rent.

Wages Expense

The total amount of wages paid to employees during a specific period as an expense to the company.

Interest Expense

The price paid by an entity for the privilege of using borrowed funds over a designated period.

Operating Income

Earnings generated from a company's core business operations, excluding deductions of interest and taxes.