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Pepper Company has accumulated data to use in preparing its annual profit plan for the...

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Accounting

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Pepper Company 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 January February March April May June July August September October November December Maintenance Cost $ 5,050 3,643 4,270 3,306 5,235 3,510 3,784 5,361 5,113 4,859 3,959 3,880 $ 51,890 Machine Hours 610 510 430 350 740 360 460 750 620 700 560 450 6,540 Sum Average $ 4,324.17 545.00 Average cost per hour ($51,890/6,540) = $7.93 p = 0.90181 r2 = 0.81326 Using the high-low method, total monthly fixed cost is calculated to be: (Do not round Intermediate calculations. Round your answer to the nearest dollar.)

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