Jorgenson Corporation has provided the following data for the first five months of the year: Using the least-squares regression method of analysis, the estimated monthly fixed component of lubrication cost is closest to:

Question

Jorgenson Corporation has provided the following data for the first five months of the year:  Using the least-squares regression method of analysis, the estimated monthly fixed component of lubrication cost is closest to:

Quizplus · Accepted Answer

Using the least squares regression method, we can find the equation for the variable cost component of lubrication cost, which is y = 79x + 1,040. The intercept term (the fixed component of cost) is estimated to be $1,040. Therefore, the closest option is C, $1,121.

Jorgenson Corporation Has Provided the Following Data for the First