Question

Help Required information The following information applies to the questions displayed below] The controller of Chittenango Chain Company believes thet the identification of the variable and fixed compon firm's costs will enable the firm to concerned about is the behavior of Indirect-materials cost. She belleves there is a correlation between machine hours and the amount of indirect materials used. make better planning and control decisions. Among the costs the controller is 5 A member of the controller's staff has suggested that least-squares regression be used to determine the cost behavior of indirect materials. The regression equation shown below was developed from 40 pairs of observations S $200+$9H where S Total monthly cost of indirect materials H: Machine hours per month ok Required: 1. Choose the correct statement(s) that explain the meaning of 200" and "9" in the regression equation S- $200-$9H.(You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) ences D The regression equation's intercept on the vertical axis is $200 The slope of the regression line is $9 per machine hour 17 The regression equation's intercept on the vertical axis is so per machine hour 7 The slope of the regression line is $200. Z None of the above 12 14./ of 14 lli Next > < Prev 10 11

Answer 1

The regression equation's intercept on the vertical axis is $200.

The slope of the regression line is $9 per machine hour.

IN this equation, $200 is the fixed cost and $9 is variable cost per machine hour thus the slope will start from from $200 on vertical axis and will increase by $9 per machine hour