Use the Following Display for the Next Questions

question 20

Short Answer

Use the following display for the next questions. The display is based on a sample of hybrid cars, SUVs, and trucks. The dependent variable is the annual greenhouse gas emissions (in tons). The independent variables are as follows:
combination miles per gallon (Mpg), engine size in liters (ES), and number of
cylinders (Cyl).

-If only one independent variable is used to predict the annual greenhouse gas emissions, which single variable is best?

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Definitions:

Variable Costing

A costing method that includes only variable manufacturing costs - direct materials, direct labor, and variable manufacturing overhead - in the cost of goods sold.

Absorption Costing

In this method of accounting, the price of manufacturing a product is calculated by summing the costs of direct materials, direct labor, and all manufacturing overheads, variable and fixed alike.

Fixed Manufacturing Overhead

The total of all costs related to manufacturing that do not change with the level of production, such as salaries of managers and rent of the factory.

Divisional Segment Margin

The profit margin for a specific division or segment of a company, calculated by subtracting direct and allocated expenses from segment revenues.