A P-Value of 89% for the Slope Coefficient in a Regression

question 82

Multiple Choice

A p-value of 89% for the slope coefficient in a regression of a cost driver against a cost indicates:

• A) The true variable costs are statistically significantly different from zero
• B) There is only an 11% chance the true variable costs are zero
• C) The relationship between the cost and the cost driver is nonlinear
• D) None of the above

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Definitions:

Direct Labor-Hours

The total hours worked by employees who are directly involved in the manufacturing process or providing a service.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, indirect labor, and materials.

Work in Process

Inventory that includes all materials, labor, and overhead costs for products that are in the process of being manufactured but are not yet completed.

Finished Goods

The final products that are completed and ready for sale to customers.