A Regression Analysis Between Sales (In $1000) and Price (In

question 118

Multiple Choice

A regression analysis between sales (in $1000) and price (in dollars) resulted in the following equation: ​ = 40 - 6x
​
The above equation implies that an

• A) increase of $1 in price is associated with a decrease of $6 in sales.
• B) increase of $8 in price is associated with a decrease of $24,000 in sales.
• C) increase of $1 in price is associated with a decrease of $240 in sales.
• D) increase of $1 in price is associated with a decrease of $6000 in sales.

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Definitions:

Labour Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain number of units, multiplied by the standard hourly wage rate.

Actual Direct Labour Rate

This measures the actual cost per hour of labor directly involved in the manufacturing process.

Materials Price Variance

The difference between the actual cost of direct materials purchased and the standard cost, multiplied by the quantity purchased.

Standard Quantity

The predetermined amount of materials or resources expected to be used in a production process or manufacturing of a product.