The armer company is accumulating data to be used in

Reference no: EM13587835

The Armer Company is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff has suggested that linear regression be employed to derive an equation in the form of y = a + bx for maintenance costs. Data regarding the maintenance hours and costs for last year and the results of the regression analysis are as follows:

	Hours of Activity	Maintenance Costs
January	530	$ 4,500
February	310	2,800
March	430	3,000
April	270	3,180
May	470	4,400
June	330	3,360
July	340	3,240
August	530	4,080
September	500	4,260
October	470	4,380
November	330	3,600
December	340	2,950

Sum	4,850	43,750
Average	404	3,646

A coefficient		1,380.51
B coefficient		5.6049
Standard error of the a cofficient	509.794
Standard error of the a cofficient	1.23146
Standard error of the estimate		382.134
R²		0.67443
T-value a		2.708
T-value b		4.551

What would be the cost equation if regression analysis is used?

Reference no: EM13587835

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