A Regression Line Is Constructed Using Data Where the Independent

question 7

Multiple Choice

A regression line is constructed using data where the independent variable has values ranging between 20 and 130. What term is used when estimating a value of y when x = 85?

• A) Extrapolation
• B) Estimation
• C) Interpolation
• D) Causation

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much revenue is contributing to fixed expenses and net income.

Variable Costing

An accounting method that only considers variable costs (costs that vary with the level of output) when calculating the cost of goods sold and production.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a unit of product.

Net Operating Income

Represents the difference between operating revenues and operating expenses.