When the Assumption of Sphericity Is Violated What Action Is

question 6

Multiple Choice

When the assumption of sphericity is violated what action is needed?

• A) Correct the model degrees of freedom.
• B) Correct the error degrees of freedom.
• C) Do both a and b
• D) Correct the F-ratio.

---

Definitions:

Net Operating Income

This is the profit a company makes from its operations, after all operating expenses have been subtracted from revenues but before taxes and interest are deducted.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much revenue is contributing to fixed expenses and net income.

Variable Costing

An accounting method that only considers variable costs (costs that vary with the level of output) when calculating the cost of goods sold and production.

Absorption Costing

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