The Method of Least Squares Was Used to Develop a Cost

question 163

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.Assume that 5,000 machine hours will be incurred in April.What would be the predicted cost of equipment maintenance for April when using the cost formula for equipment maintenance?

• A)$32,000
• B)$93,000
• C)$125,000
• D)$157,000

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