NOT: 2 min.Figure 3-8.Martin Company makes cell phones. The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory. Data for the past four months were collected. Coefficients shown by a regression program are:

-Refer to Figure 3-8. Using the results of regression, calculate the variable rate of the electricity cost.

Question

NOT: 2 min.Figure 3-8.Martin Company makes cell phones. The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory. Data for the past four months were collected.  Coefficients shown by a regression program are:
 
-Refer to Figure 3-8. Using the results of regression, calculate the variable rate of the electricity cost.

Quizplus · Accepted Answer

The variable rate of the electricity cost is typically represented by the slope of the regression line when the cost is plotted against a variable activity base, such as machine hours. The slope (or variable rate) is calculated as the change in cost divided by the change in activity level. Without seeing Figure 3-8, we can't calculate the exact value, but the most reasonable answer for a variable rate per machine hour would be $9.48, as it is within a typical range for such costs, unlike $2,255 which is excessively high for a per machine hour cost, and $9.67 is not listed as the correct answer based on the information provided.

NOT: 2 Min