Pam’s Stables used two different independent variables (trainer's hours and number of horses) in two different equations to evaluate the cost

ACCOUNTING

Multiple Choice

Pam’s Stables used two different independent variables (trainer's hours and number of horses) in two different equations to evaluate the cost of training horses. The most recent results of the two regressions are as follows:



Trainer's hours:

Variable Coefficient Standard Error t-Value

Constant 913.32 198.12 4.61

Independent Variable 20.90 2.94 7.11



r2 = 0.56



Number of horses:

Variable Coefficient Standard Error t-Value

Constant 4,764.50 1,073.09 4.44

Independent Variable 864.98 247.14 3.50



r2 = 0.63



What is the estimated total cost for the coming year if 16,000 trainer hours are incurred and the stable has 400 horses to be trained, based on the best cost driver?

a. $99,929.09

b. $350,756.50

c. $335,313.32

d. $13,844,444.50

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