SCENARIO 13-5
a Microeconomist Wants to Determine How Corporate Sales

question 202

Multiple Choice

SCENARIO 13-5
A microeconomist wants to determine how corporate sales are influenced by capital and wage spending by companies.She proceeds to randomly select 26 large corporations and record information in millions of dollars.The Microsoft Excel output below shows results of this multiple regression. SUMMARY OUTPUT
Regression Statistics
$\begin{array} { l l } \text { Multiple R } & 0.830 \\ \text { R Square } & 0.689 \\ \text { Adjusted R Square } & 0.662 \\ \text { Standard Error } & 17501.643 \\ \text { Observations } & 26 \end{array}$
ANOVA
$\begin{array} { l r c c c c } & d f & \text { SS } & \text { MS } & F & \text { Signif } F \\ \text { Regression } & 2 & 15579777040 & 7789888520 & 25.432 & 0.0001 \\ \text { Residual } & 23 & 7045072780 & 306307512 & & \\ \text { Total } & 25 & 22624849820 & & & \end{array}$


$\begin{array}{lrrrr} & \text { Coeff } & \text { StdError } & t \text { Stat } & \text { P-value } \\\text { Intercept } & 15800.0000 & 6038.2999 & 2.617 & 0.0154 \\\text { Capital } & 0.1245 & 0.2045 & 0.609 & 0.5485 \\\text { Wages } & 7.0762 & 1.4729 & 4.804 & 0.0001\end{array}$

-Referring to SCENARIO 13-5, which of the independent variables in the model are significant at the 5% level?

• A)Capital, Wages
• B)Capital
• C)Wages
• D)None of the above

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Definitions:

Activity-Based Costing System

A costing method that assigns overhead and indirect costs to specific products or activities based on their use of resources.

Activity Cost

The expense associated with carrying out a specific activity, such as manufacturing a product or delivering a service.

Finishing

The process of completing or refining the final details or surface treatment of a product, often to improve appearance or functionality.

Activities

Tasks, operations, or works carried out in an organization as part of its business processes.