Figure 3-6
The Stanford Company incurred the following maintenance cost during a five month period:

-Refer to Figure 3-6. Using a computer or calculator, compute the estimate of variable cost per unit of production using the method of least squares. Rounded to two decimal places, this value would be
A) $3.21.
B) $2.70.
C) $1.31.
D) $1.23.

Question

Figure 3-6
The Stanford Company incurred the following maintenance cost during a five month period:
 
-Refer to Figure 3-6. Using a computer or calculator, compute the estimate of variable cost per unit of production using the method of least squares. Rounded to two decimal places, this value would be
A) $3.21. 
B) $2.70. 
C) $1.31. 
D) $1.23.

Quizplus · Accepted Answer

The least squares method calculates the line of best fit by minimizing the sum of the squares of the vertical distances of the points from the line. The variable cost per unit is the slope of this line, which is $1.31 when calculated using the least squares method.

Figure 3-6 the Stanford Company Incurred the Following Maintenance Cost During a During