The Value Added to and Subtracted from a Point Estimate

question 14

Multiple Choice

The value added to and subtracted from a point estimate in order to develop an interval estimate of the population parameter is known as the

• A) confidence level.
• B) margin of error.
• C) parameter estimate.
• D) planning value.

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Definitions:

Data Collected

The process of gathering and measuring information on targeted variables to answer relevant questions and evaluate outcomes.

Direct Materials Price Variance

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

Flexible Budget

A flexible budget adjusts expenses based on changes in actual revenue or other activities, allowing for more accurate budgeting and variance analysis.

Variable Costs

Expenses that vary in direct proportion to changes in activity levels or volumes, such as raw materials and direct labor costs.