PristinDay Company produces handheld calculators.The company controller wanted to calculate the fixed and variable costs associated with the maintenance cost incurred by the factory.Data for the past four months were collected as follows:

Coefficients shown by a regression program are as follows:

Using the results of regression, calculate the budgeted cost for maintenance next month assuming that 200 machine hours are budgeted.(Round the answer to the nearest dollar.)

A) $3,000
B) $2,700
C) $1,200
D) $4,225

Question

PristinDay Company produces handheld calculators.The company controller wanted to calculate the fixed and variable costs associated with the maintenance cost incurred by the factory.Data for the past four months were collected as follows:

Coefficients shown by a regression program are as follows:

Using the results of regression, calculate the budgeted cost for maintenance next month assuming that 200 machine hours are budgeted.(Round the answer to the nearest dollar.)
 
A) $3,000 
B) $2,700 
C) $1,200 
D) $4,225

Quizplus · Accepted Answer

Total Maintenance Cost = Fixed Cost + (Variable Rate × Machine Hours) = $1,000 + ($8.50 × 200)
= $2,700

PristinDay Company Produces Handheld Calculators