TABLE 14-5 A Microeconomist Wants to Determine How Corporate Sales Are Influenced

question 10

Multiple Choice

TABLE 14-5
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.
-Referring to Table 14-5, one company in the sample had sales of $21.439 billion (Sales = 21,439) . This company spent $300 million on capital and $700 million on wages. What is the residual (in millions of dollars) for this data point?

• A) 790.69
• B) 648.31
• C) -648.31
• D) -790.69

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Definitions:

Customizing

The process of modifying products or services to meet specific customer needs or preferences.

Traditional Costing

A costing method used for expense allocation in which the cost of products is based on the amount of manufacturing-related resources they consume, without differentiating between fixed and variable costs.

Activity-Based Costing

A costing method that identifies the activities in an organization and assigns the cost of each activity according to the actual consumption by each.

Manufacturing Overhead

includes all manufacturing costs that are not directly related to the production of goods, such as factory rent, utilities, and maintenance expenses.