Midgett Co. has accumulated data to use in preparing its annual profit plan for the upcoming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff suggested that linear regression be employed to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis are as follows: MonthMaintenanceCost Machine HoursJan.$5,040 620 Feb. 3,648 420 Mar. 4,320 520 Apr. 3,331 390 May 5,221 650 June 3,550 400 July 3,655 430 Aug. 5,365 690 Sept. 5,110 640 Oct. 4,866 610 Nov. 3,944 460 Dec. 3,790 440 Sum$51,840 6,270 Average$4,320.00 522.50 Average cost per hour ($51,840/6,270) = $8.27 (rounded to the nearest cent)r = 0.99821r2 = 0.99780The percent of the total variance that can be explained by the regression equation is:

It is given that r = 0.99821r2 = 0.99780

Answered: The percent of the total variance that…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Midgett Co. has accumulated data to use in preparing its annual profit plan for the upcoming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff suggested that linear regression be employed to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis are as follows:

Month	Maintenance Cost		Machine Hours
Jan.	$	5,040		620
Feb.		3,648		420
Mar.		4,320		520
Apr.		3,331		390
May		5,221		650
June		3,550		400
July		3,655		430
Aug.		5,365		690
Sept.		5,110		640
Oct.		4,866		610
Nov.		3,944		460
Dec.		3,790		440
Sum	$	51,840		6,270
Average	$	4,320.00		522.50

Average cost per hour ($51,840/6,270) = $8.27 (rounded to the nearest cent)

r = 0.99821
r² = 0.99780

The percent of the total variance that can be explained by the regression equation is:

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