Figure 3-14. Blacken Company manufactures motorcycles.The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory.Data for the past five months were collected.
Refer to Figure 3-14.Using a regression program,the forecasted utility cost at 2,550 machine hours (rounded to the nearest dollar)is

Question

Figure 3-14. Blacken Company manufactures motorcycles.The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory.Data for the past five months were collected.
 Refer to Figure 3-14.Using a regression program,the forecasted utility cost at 2,550 machine hours (rounded to the nearest dollar)is

Quizplus · Accepted Answer

Based on the regression analysis, the formula for the total utility cost is:
Total utility cost = $16,270 + ($7.28 x machine hours)
Substituting 2,550 machine hours into the formula, we get:
Total utility cost = $16,270 + ($7.28 x 2,550) = $33,146.40, which rounds up to $33,147. Therefore, the answer is choice C.