One of the Variables That Are Being Considered for Inclusion

question 80

True/False

One of the variables that are being considered for inclusion in a multiple regression model is marital status of the customer. There are four possible responses listed for this variable. Based on this, three dummy variables will need to be created and incorporated into the regression model.

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Definitions:

Variable Costs

Expenditures that adjust based on the quantity of production or the scale of sales.

Utility Rates

Charges imposed by utility companies for the use of services such as electricity, gas, water, and sewer.

Contribution Margin

The amount by which the sale of a product or service exceeds its variable costs, used to cover fixed costs and contribute to net income.

Fixed Costs

Expenses that do not change with the level of production or sales over a relevant period, such as rent, salaries, and insurance.