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Nations Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area....

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Accounting

Nations Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firms controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firms equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y = a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows:

Month Hours of Maintenance Service Maintenance Costs
January 560 $ 5,520
February 470 4,260
March 260 2,820
April 500 4,280
May 340 2,970
June 460 4,170
July 350 3,060
August 410 3,590
September 470 3,970
October 370 3,290
November 370 3,250
December 350 3,110
Total 4,910 $ 44,290
Average 409 * $ 3,691 *

*Rounded

Using your answer to requirement (1), what is the variable component of the maintenance cost? (Round your answer to two decimal places.)

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