Thane Company Is Interested in Establishing the Relationship Between Electricity

question 44

Multiple Choice

Thane Company is interested in establishing the relationship between electricity costs and machine hours.Data have been collected and a regression analysis prepared using Excel.The monthly data and the regression output follow: $$\begin{array} { | l | r | r | } \hline \text { Month } & \text { Machine Hours } & \text { Electricity Costs } \\\hline \text { January } & 2,500 & 18,400 \\\hline \text { February } & 2,900 & 21,000 \\\hline \text { March } & 1,900 & 13,500 \\\hline \text { April } & 3,100 & 23,000 \\\hline \text { May } & 3,800 & 28,250 \\\hline \text { June } & 3,300 & 22,000 \\\hline \text { Juby } & 4,100 & 24,750 \\\hline \text { August } & 3,500 & 22,750 \\\hline \text { September } & 2,000 & 15,500 \\\hline \text { October } & 3,700 & 26,000 \\\hline \text { November } & 4,700 & 31,000 \\\hline \text { December } & 4,200 & 27,750 \\\hline\end{array}$$

If the controller uses the high-low method to estimate costs,the fixed cost portion of the cost equation for electricity cost is:

• A) $3,726.88.
• B) $1,425.18.
• C) $1,625.00.
• D) $22,825.00.

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Definitions:

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