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 yearly utility cost equation (with all variables to the nearest penny) 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 yearly utility cost equation (with all variables to the nearest penny) is

Quizplus · Accepted Answer

The regression equation for the yearly utility cost is: 
Total utility cost ($) = a + b × Machine hours 
where a is the fixed cost, b is the variable cost per unit of activity (machine hours). 
From the options given, only option B has a fixed cost of $10,630.80 and a variable cost of $8.83 per machine hour. Therefore, option B is the correct choice.

Blacken Company Manufactures Motorcycles