PristinDay Company produces handheld 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 as follows:
Coefficients shown by a regression program are as follows:
- Using the results of regression, calculate the variable rate of maintenance cost.
Definitions:
Return On Investment
A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the net profit from the investment by the original cost of the investment.
Residual Income
The income that remains after deducting all required costs of capital from operating income.
Net Operating Income
This is the total profit of a company after operating expenses are subtracted from gross income but before income from investments, interest, and taxes are calculated.
Return On Investment
A measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.
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