1) Using the high/low method, determine the cost estimation equation. A) Y = -652.27 + 10.34x, where X = DL Hours. B) Y = -856.82 + 11.02x, where X = DL Hours. C) Y= 652.27 + 10.34x, where X = DL Hours. D) Y= -1,187.50 + 12.13x, where X=DL Hours. 2) Based on the regression results, how well does the independent variable explain the variation in the dependent variable? A) Excellent. The p-value for the intercept coefficient is 0.4533. B) Poorly, the p-value for DL Hours is 0.0000. C) Poorly. The r-square is 0.9117. D) Excellent. The r-square is 0.9117. 3) What is the cost estimation equation for estimating maintenance cost? A) Maintenance Costs = 266.2129 + 0.4533 X, where X = DL Hours. B) DL Hours = 266.2129 + 8.4907 X, where X = Maintenance Costs. C) Maintenance Costs = 266.2129 + 8.4907 X, where X = DL Hours. D) Maintenance Costs = 8.4907 + 266.2129 X, where X = DL Hours. 4) If we are trying to estimate maintenance costs for January of the next year, and we estimate the DL Hours for that month to be 150 hours, how much maintenance cost should we expect given our estimation equation determined by regression analysis? A) $135,777. B)$497. C) $2,871. D) $4,596. 5) Given the results, and based on your understand of statistics and analyzing the coefficient results, how reliable is our cost estimation equation? A) Very reliable. The p-value for DL Hours is reliable at 0.0000, and we always ignore the intercept coefficient. B) Reliable with caution. The p-value for DL hours is reliable at 0.0000 but the intercepts p-value is 0.4533 meaning it is not reliable. C) Reliable with caution. The p-value for DL Hours is not reliable at 0.0000 but the intercepts p-value is 0.4533 meaning it is very reliable. D) Not reliable. The p-value for DL Hours is 0.0000 meaning it is not reliable.

Use the following data to answer the next five (5) questions. The Balance 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 a cost estimation equation. Data regarding the maintenance costs and direct labor hours for last year and the results of the regression analysis are below. Use this data to answer the next five questions. Maintenance DL Hours Costs January 480 $4,200 February 320 3,000 March 400 3,750 April 300 2,450 May 490 4,350 June 310 3,125 July 320 3,030 August 520 4,72 September 500 4,875 October 470 3,910 November 350 3,110 December 340 3,425 Regression Statistics Multiple R 0.9548 R Square 0.9117 Adjusted R Square 0.9029 Standard Error 237-5222 Observations 12.0000 ANOVA of SS MS FSignificance F Regression 1.0000 5,825,056.9616 5,825,056.9616 103.2504 0.0000 Residual 10.0000 564,168.0384 56,416.8038 Total 11.0000 6,389,225.0000 Coefficients Standard Error Stat P-value Lower 95% Upper 956 Intercept 266.2129 341.2006 0.7802 0.4533 (494,0294) 1,026.4552 DL Hours 8.4907 0.8356 10.1612 0.0000 6.6289 10.3526