Figure 3-7. Margola Company produces hand-held calculators.The company controller wanted to calculate the fixed and variable costs associated with the maintenance cost incurred by the factory.Data for the past four months were collected.
Coefficients shown by a regression program are:
Refer to Figure 3-7.Using the results of regression,calculate the fixed cost of maintenance.
A)$1,150.00
B)$978.37
C)$9.06
D)None of these are correct

Question

Figure 3-7. Margola Company produces hand-held calculators.The company controller wanted to calculate the fixed and variable costs associated with the maintenance cost incurred by the factory.Data for the past four months were collected.
 Coefficients shown by a regression program are:
 Refer to Figure 3-7.Using the results of regression,calculate the fixed cost of maintenance.
A)$1,150.00 
B)$978.37 
C)$9.06 
D)None of these are correct

Quizplus · Accepted Answer

The fixed cost is represented by the intercept term in the regression equation. In this case, the intercept term is $1,150.00. Therefore, the fixed cost of maintenance is $1,150.00.