If the Intercept Is Found to Be 2 and the Slope

question 47

Multiple Choice

If the intercept is found to be 2 and the slope is found to be 5 in a regression result formula,then:

• A)y = 2 + 3x.
• B)y = 2 + 5x.
• C)x = 2 + 5y.
• D)x = 2 + 3y.
• E)y = a + 2(5).

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance.

Operating Leverage

A measure of how sensitive a company's operating income is to changes in revenue, indicating the degree to which fixed costs are utilized.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.