The McGraw Company Is Accumulating Data to Be Used in Preparing

question 42

Multiple Choice

The McGraw Company is accumulating data to be used in preparing its annual profit plan for the coming year.The cost behavior pattern of the maintenance costs must be determined.The accounting staff has suggested that linear regression be employed to derive an equation in the form of y = a + bx for maintenance costs.Data regarding the maintenance hours and costs for last year and the results of the regression analysis are as follows: (CMA adapted)

What would be the cost equation if regression analysis is used?

• A) Maintenance Costs = 7.2884 + 684.65 × Hours of Activity.
• B) Maintenance Costs = 684.65 + 49.515 × Hours of Activity.
• C) Maintenance Costs = 684.65 + 7.2884 × Hours of Activity.
• D) Maintenance Costs = 34.469 + .99724 × Hours of Activity.

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Definitions:

Behavior-Therapy Methods

Techniques used in behavioral therapy to change maladaptive behaviors, focusing on observable behaviors and their modifications.

Virtual Therapy

A method of psychological counseling delivered through online platforms, allowing for therapy sessions in virtual environments.

Reducing Fears

Techniques or strategies aimed at lessening feelings of fear or anxiety, often through exposure, cognitive restructuring, or relaxation methods.

Gestalt Therapy

A form of psychotherapy that emphasizes personal responsibility and focuses on the individual's experience in the present moment, the therapist-client relationship, the environmental and social contexts of a person's life, and the self-regulating adjustments people make as a result of their overall situation.