Use Indicator (Dummy) Variables in Multiple Regression $$S = 0.795553 \quad R - S q = 94.3 \% \quad R - S q ( \operatorname { adj } ) = 93.7 \%$$

question 12

Multiple Choice

Use indicator (dummy) variables in multiple regression.
-A sample of 22 firms was selected from the high tech industry (Industry = 1) and the
Financial services sector (Industry = 0) . Data were collected on a number of variables in
An attempt to develop a model to predict Turnover Rate (%) . The final model deemed
Most appropriate includes two predictor variables: Job Growth (%) and Industry. The
Results are shown below. The predicted turnover rate for a firm in the financial services
Sector with a 2% job growth rate is Dependent Variable is Turnover Rate
$\begin{array} { l r r r r } \text { Predictor } & \text { Coef } & \text { SE Coef } & \text { T } & \text { P } \\ \text { Constant } & 8.8384 & 0.2776 & 31.83 & 0.000 \\ \text { Job Growth } & - 0.57358 & 0.06686 & - 8.58 & 0.000 \\ \text { Industry } & - 3.1395 & 0.4236 & - 7.41 & 0.000 \end{array}$
$$S = 0.795553 \quad R - S q = 94.3 \% \quad R - S q ( \operatorname { adj } ) = 93.7 \%$$

• A) 8.25%
• B) 7.69%
• C) 4.56%
• D) 6.19%
• E) None of the above.

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Definitions:

Process Costing Systems

An accounting method used to allocate costs to units of product in processes that mass produce similar items, calculating the cost per unit.

Standardized Products

Goods or services that are uniform in quality and performance, produced in large quantities, and often interchangeable.

Manufacturing Steps

Processes or stages involved in converting raw materials into finished goods.

Direct Labor

Direct labor refers to the wages or salaries paid to employees who are directly involved in the manufacturing or production of goods.