In Regression Analysis, If the Independent Variable Is Measured in Pounds

question 105

Multiple Choice

In regression analysis, if the independent variable is measured in pounds, the dependent variable

• A) must also be in pounds.
• B) must be in some unit of weight.
• C) cannot be in pounds.
• D) can be measured in any units.

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Definitions:

Variable Expenses

Costs that change in proportion to the activity of a business, such as raw material costs, sales commissions, or delivery charges.

Fixed Expenses

Expenses that remain constant regardless of variations in the level of production or the volume of sales, like lease payments or wages.

Degree Of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales volume, indicating the impact of fixed costs on earnings.

Variable Expenses

Expenses that vary directly with the amount of activity or production volume.