Nation's Capital Fitness, Incorporated, operates a chain of fitness centers in the Washington, D.C., area. The...

Transcribed Image Text:

Nation's Capital Fitness, Incorporated, operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y= a + bx, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: Hours of Maintenance Maintenance Month January Service Costs 560 $ 5,110 February 480 4,240 March 280 2,730 April 470 4,300 May 350 3,030 June 460 4,120 July 320 3,000 August 430 3,590 September 490 4,000 October 380 3,220 November 350 3,170 December 340 3,070 Total Average 4,910 $ 43,580 409 $ 3,632 PR 6-38 (Algo) Part 3 Compute the predicted maintenance cost... 3. Compute the predicted maintenance cost at 670 hours of activity. Maintenance cost Nation's Capital Fitness, Incorporated, operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y= a + bx, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: Hours of Maintenance Maintenance Month January Service Costs 560 $ 5,110 February 480 4,240 March 280 2,730 April 470 4,300 May 350 3,030 June 460 4,120 July 320 3,000 August 430 3,590 September 490 4,000 October 380 3,220 November 350 3,170 December 340 3,070 Total Average 4,910 $ 43,580 409 $ 3,632 PR 6-38 (Algo) Part 3 Compute the predicted maintenance cost... 3. Compute the predicted maintenance cost at 670 hours of activity. Maintenance cost