Marigold Company makes furniture. The company controller wanted to calculate the

Question

Marigold Company makes furniture. The company controller wanted to calculate the fixed and variable costs associated with electricity use in the factory. Data for the past four months were collected as follows: Electricity Machine Month cost hours January $8,000 600 February 7,200 650 March 7,500 580 April 8,200 690 Coefficients shown by a regression program are as follows: Intercept 3,500 X Variable 1 7.25 Using the results of regression, calculate the variable rate of the electricity cost. a. $7.25 per machine hour b. $5.75per machine hour c. $6.39 per machine hour d. None of these choices are correct.

Explanation / Answer

The variable rate of the electricity cost is the value of Variable 1 which is $7.25 per machine hour Option A is correct

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