The management of Hamano Corporation would like for you to analyze their repair costs, which are listed below: Management believes that repair cost is a mixed cost that depends on the number of machine-hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to:
A) $1.47 per machine-hour plus $29,915 per month
B) $0.83 per machine-hour plus $31,481 per month
C) $1.20 per machine-hour plus $30,506 per month
D) 15.22 per machine-hour plus $33,445 per month

Question

The management of Hamano Corporation would like for you to analyze their repair costs, which are listed below:  Management believes that repair cost is a mixed cost that depends on the number of machine-hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to:
A) $1.47 per machine-hour plus $29,915 per month 
B) $0.83 per machine-hour plus $31,481 per month 
C) $1.20 per machine-hour plus $30,506 per month 
D) 15.22 per machine-hour plus $33,445 per month

Quizplus · Accepted Answer

The Answer of The management of Hamano Corporation would like for you to analyze their repair costs, which are listed below:  Management believes that repair cost is a mixed cost that depends on the number of machine-hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to:
A) $1.47 per machine-hour plus $29,915 per month 
B) $0.83 per machine-hour plus $31,481 per month 
C) $1.20 per machine-hour plus $30,506 per month 
D) 15.22 per machine-hour plus $33,445 per month

The Management of Hamano Corporation Would Like for You to Analyze