The management of Hamano Corporation would like for you to analyze their repair costs, which are listed below:

\begin{array}{lcc} & \begin{array}{c}\text { Machine- } \\\text { Hours }\end{array} & \begin{array}{c}\text { Repair } \\\text { Costs }\end{array} \\\text { April } & 4,459 & \$ 98,523 \\\text { May } & 4,426 & \$ 98,296 \\\text { June } & 4,493 & \$ 98,781 \\\text { July } & 4,417 & \$ 98,207 \\\text { August } & 4,432 & \$ 98,349 \\\text { September } & 4,446 & \$ 98,420 \\\text { October } & 4,489 & \$ 98,749 \\\text { November } & 4,475 & \$ 98,654\end{array}

Management believes that repair cost is a mixed cost that depends on the number of machine-hours. Using the least-squares regression method, the estimates of the variable and fixed components of repair cost would be closest to:
A) $22.11 per machine-hour plus $98,497 per month
B) $7.37 per machine-hour plus $65,670 per month
C) $8.19 per machine-hour plus $62,015 per month
D) $7.55 per machine-hour plus $64,859 per month

Seifer Inc

Multiple Choice

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