Business, 03.03.2022 05:40 pennygillbert

The controller of Chittenango Chain Company believes that the identification of the variable and fixed components of the firm’s costs will enable the firm to make better planning and control decisions. Among the costs the controller is concerned about is the behavior of indirect-materials cost. She believes there is a correlation between machine hours and the amount of indirect materials used. 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 = $175 + $4H

where S = Total monthly cost of indirect materials
H = Machine hours per month

Choose the correct statement(s) that explain the meaning of "175" and "4" in the regression equation S= $175 + $4H.

a. The regression equation's intercept on the vertical axis is $175.unanswered
b. The slope of the regression line is $4 per machine hour. unanswered
c. The regression equation's intercept on the vertical axis is $4 per machine hour. unanswered
d. The slope of the regression line is $175.unanswered
e. None of the above.

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The controller of Chittenango Chain Company believes that the identification of the variable and fix...

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