Vanco Industries wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis showed the following information (Note: only a portion of the regression analysis results is presented here.)
-At Vanco Industries, what is the fixed cost (round to nearest cent)?
A) $2,413.21
B) $0.90
C) $143.98
D) $0.98

Question

Vanco Industries wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis showed the following information (Note: only a portion of the regression analysis results is presented here.) 
-At Vanco Industries, what is the fixed cost (round to nearest cent)?
A) $2,413.21 
B) $0.90 
C) $143.98 
D) $0.98

Quizplus · Accepted Answer

The intercept of the regression line represents the fixed cost. In this case, the intercept value is $2,413.21, hence the fixed cost is $2,413.21.

Vanco Industries Wanted to Determine the Relationship Between Its Monthly