Regression analysis multiple choice Lorenzo Company estimate

Regression analysis, multiple choice. Lorenzo Company estimated the behavior pattern of maintenance costs. Data regarding maintenance hours and costs for the previous year and the results of the regression analysis follow: Month Hours of Activity Maintenance Costs 240 160 200 150 250 155 160 260 245 235 175 170 2,400 S 4,200 3,000 3,600 2,820 4,350 2,960 3,030 4,470 4,260 4,050 3,300 3,160 $43,200 January February March April May June August September October November December Sum for 12 mon

Solution

Solution:

a. In Regression Analysis Equation TC = F + VX,

where, V = Variable cost cofficient

Answer: 3

b. In Regression Analysis Equation TC = F + VX,

where, TC = Dependent variable.

Answer: 3

c. In Regression Analysis Equation TC = F + VX,

where, X = Independent variable.

Answer: 4

d. Given that there are 180 hours in the month. So, the maintenance cost would be as follows

TC = F + VX

TC = $684.65 + $14.577 (180 hours)

TC = $3,309.

Answer: 1