The Method of Least Squares Was Used to Develop a Cost

question 30

Multiple Choice

The method of least squares was used to develop a cost equation to predict the cost of monthly equipment maintenance for the Regina Company. The following computer output was received:
The driver used was the number of machine hours.
$\begin{array}{lr}\text { Intercept } & 32,000 \\\text { Slope } & 25\end{array}$
-Refer to the Figure.What was the cost formula for equipment maintenance?

• A)total maintenance cost = $25 × machine hours
• B)total maintenance cost = $32,000
• C)total maintenance cost = $32,000 + ($25 × machine hours)
• D)total maintenance cost = $25 + ($32,000 × machine hours)

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Definitions:

Transportation

The movement of goods or people from one location to another through various modes including road, rail, air, and sea.

Product

An item or service that is created, offered, and maintained to fulfill the needs, wants, or desires of consumers.

Marketing Mix

A set of actionable marketing tools—product, price, place, and promotion—that a company uses to pursue its marketing objectives in the target market.

Price

The amount of money expected, required, or given in payment for a good or service.