The CEO of Central Industries has requested a forecast for next month’s maintenance costs. Three possible levels of operations and potential cost drivers are as follows (all within the relevant range):

Refer to the information in Exercise 2.33. Data are available on the Wiley Web site at

A. If you have not already done so, perform a regression analysis using the most appropriate cost driver for estimating maintenance costs. Write the cost function.
B. Use the cost function from Part A to develop a flexible budget for the three possible levels ofoperations.

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