In Regression Analysis, the Coefficient of Determination $R ^ { 2 }$

question 181

Short Answer

In regression analysis, the coefficient of determination, $R ^ { 2 }$ , measures the amount of variation in y that is: $\begin{array}{|l|l|}\hline\text { A. } & \text { caused by the variation in \( x \).}\\\hline \text { B. } & \text {explained by the variation in \( x \). } \\\hline \text { C. } &\text { unexplained by the variation in \( x \).}\\\hline \text { D. } &\text {caused by the variation in \( x \) or explained by the variation in \( x \). }\\\hline\end{array}$

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual products based on a specific activity base.

Traditional Costing System

An accounting method that assigns overhead costs to products based on a predetermined rate, typically using direct labor hours or machine hours.

Direct Labor-Hours

The cumulative hours spent by workers who are directly engaged in creating products, serving as the foundation for distributing labor expenses among products.

Activity-Based Costing

A pricing approach that allocates overhead and indirect expenses to associated goods and services according to their consumption of resources.