Pine View Hospital wants to determine the cost behavior pattern of maintenance costs for its X-ray machines.
Question:
Pine View Hospital wants to determine the cost behavior pattern of maintenance costs for its X-ray machines. The hospital has decided to use linear regression to examine the costs. The prior year’s data regarding maintenance hours and costs are as follows:
Required
A. Perform a regression analysis on the above data. What maintenance costs should be budgeted for a month in which 430 maintenance hours will be worked?
B. What is the percentage of the total variance that can be explained by your analysis?
C. Use the high/low method to estimate a cost formula for Pine View. How similar is your high/low solution to the regressionsolution?
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Related Book For
Managerial Accounting A Focus on Ethical Decision Making
ISBN: 978-0324663853
5th edition
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins
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