Exhibit 13-8
the Following Estimated Regression Model Was Developed Relating $\hat { Y }$

question 105

Multiple Choice

Exhibit 13-8
The following estimated regression model was developed relating yearly income Y in $1,000s) of 30 individuals with their age X1) and their gender X2) 0 if male and 1 if female) .
$\hat { Y }$ =30+0.7X1+3X2
Also provided are SST = 1,200 and SSE = 384.
-Refer to Exhibit 13-8. The yearly income of a 24-year-old female individual is

• A) $19.80
• B) $19,800
• C) $49.80
• D) $49,800

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Definitions:

Fixed Costs

Expenses that remain constant in total amount irrespective of fluctuations in the activity level of a business, e.g., insurance premiums.

Composite Unit

A grouping of assets or costs that are combined and treated as a single unit for accounting or valuation purposes.

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and labor.

Fixed Costs

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