Recent maintenance costs of Divers Corporation are listed below: Management believes that maintenance cost is a mixed cost that depends on machine-hours.Using the least-squares regression method, the estimate of the variable component of maintenance cost per machine-hour is closest to:

Question

Recent maintenance costs of Divers Corporation are listed below:  Management believes that maintenance cost is a mixed cost that depends on machine-hours.Using the least-squares regression method, the estimate of the variable component of maintenance cost per machine-hour is closest to:

Quizplus · Accepted Answer

The least-squares regression method was used to estimate the variable component of maintenance cost per machine-hour. From the graph, we can see that the slope of the regression line (which gives us the variable cost per machine-hour) is approximately $4.43. Therefore, the closest estimate of the variable component of maintenance cost per machine-hour is $4.43.

Recent Maintenance Costs of Divers Corporation Are Listed Below