Reference: 08-13
Hooper Corporation Produces and Sells Two Models of Vacuum

question 15

Multiple Choice

Reference: 08-13
Hooper Corporation produces and sells two models of vacuum cleaners, Standard and Deluxe. The company records show the following monthly data relating to these two products: $$\begin{array} { | l | l | l | l | } \hline & \text { Standard } & & \text { Delwxe } \\\hline \text { Selling price per unit } & \$ 150 & & \$ 165 \\\hline \text { Variable production costs } & 120 & & 126 \\\hline \text { Variable selling expense per unit } & 16 & & 13 \\\hline \text { Expected monthly sales in units } & 600 && 1,200 \\\hline \text { Total monthly fixed cost } & & \$ 15,000 & \\\hline\end{array}$$
-If the expected monthly sales in units were divided equally between the two models (900 Standard and 900 Deluxe) , the break-even level of sales would be:

• A)higher than with the expected sales mix.
• B)lower than with the expected sales mix.
• C)the same as with the expected sales mix.
• D)cannot be determined with the available data.

---

Definitions:

Multiple Linear Regression Model

A statistical technique that models the relationship between one dependent variable and two or more independent variables.

Partial Regression Coefficients

Parameters in a multiple regression model that measure the impact of a change in one predictor variable on the response variable, holding all other predictors constant.

Multiple Regression Model

A predictive method in statistics using multiple variables as predictors to estimate the outcome of a response variable.

Multidimensional Space

An abstract mathematical concept, involving more than three dimensions, that can represent complex data structures or physical phenomena.