In the Regression Model $Y _ { i } = \beta _ { 0 } + \beta _ { 1 } X _ { i } + \beta _ { 2 } D _ { i } + \beta _ { 3 } \left( X _ { i } \times D _ { i } \right) + u _ { i }$

question 14

Multiple Choice

In the regression model $Y _ { i } = \beta _ { 0 } + \beta _ { 1 } X _ { i } + \beta _ { 2 } D _ { i } + \beta _ { 3 } \left( X _ { i } \times D _ { i } \right) + u _ { i }$
where X is a continuous
variable and D is a binary variable, to test that the two regressions are identical, you must use the

• A) t -statistic separately for \(\beta _ { 2 } = 0 , \beta _ { 3 } = 0\)
• B) F -statistic for the joint hypothesis that \(\beta _ { 0 } = 0 , \beta _ { 1 } = 0\)
• C) t -statistic separately for \(\beta _ { 3 } = 0\)
• D) F -statistic for the joint hypothesis that \(\beta _ { 2 } = 0 , \beta _ { 3 } = 0\)

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Definitions:

Factory Overhead

Factory overhead encompasses all indirect costs involved in manufacturing a product, including utility expenses, maintenance of equipment, and salaries of indirect labor.

Direct Materials

Direct materials are raw materials that are directly used in the manufacturing process of a product and are easily identifiable and measurable.

Cost of Goods Manufactured

Refers to the total production cost incurred by a company to manufacture products in a specific period, including materials, labor, and overhead costs.

Factory Overhead

All manufacturing-related costs excluding those for direct labor and direct materials.