If the controller uses regression analysis to estimate costs,the cost equation for electricity cost is:
A)Cost = $1,425.18 + $12.00 $\times$ Machine-hours.
B)Cost = $3,726.88 + $1,682.82 $\times$ Machine-hours.
C)Cost = $1,682.82 + $0.49 $\times$ Machine-hours.
D)Cost = $3,726.88 + $5.77 $\times$ Machine-hours.

Question

Quizplus · Accepted Answer

The cost equation for electricity cost using regression analysis typically includes a fixed cost and a variable cost per unit of activity (machine-hours in this case). Option D provides a reasonable fixed cost and a variable cost per machine-hour that aligns with typical regression analysis outputs.

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