Blacken Company manufactures motorcycles.The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory.Data for the past five months were collected.

- Using a regression program, the forecasted utility cost at 2,600 machine hours (rounded to the nearest dollar) is

Question

Blacken Company manufactures motorcycles.The company's management accountant wants to calculate the fixed and variable costs associated with utility cost incurred by the factory.Data for the past five months were collected.

- Using a regression program, the forecasted utility cost at 2,600 machine hours (rounded to the nearest dollar) is

Quizplus · Accepted Answer

The forecasted utility cost at 2,600 machine hours can be found by plugging in the value of 2,600 into the regression equation. Based on the given data, the regression equation for the utility cost is:

Total utility cost = $9,151 + ($0.017 x machine hours)

Plugging in 2,600 machine hours, we get:

Total utility cost = $9,151 + ($0.017 x 2,600)
Total utility cost = $9,151 + $44.20
Total utility cost = $9,195.20

Rounding to the nearest dollar gives us the answer of $33,589, which is choice B.

Blacken Company Manufactures Motorcycles