The Problem with Measuring Dispersion by Merely Averaging All the Deviations

question 8

Multiple Choice

The problem with measuring dispersion by merely averaging all the deviations between each score and the overall mean is that

• A) positive and negative deviations will balance out.
• B) squared values make intuitive interpretation difficult.
• C) dividing by (N-1) gives a biased statistic.
• D) There are no problems with measuring dispersion this way.

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Definitions:

Fringe Benefits

Additional compensation provided to employees beyond their normal wages or salaries, such as health insurance, retirement plans, and paid vacations.

Standard Costing System

An accounting method that assigns predetermined costs to goods and services, used to control costs and measure performance.

Fixed Overhead

Regular, ongoing expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Standard Costing

An accounting method that applies estimated costs to product costs for budgeting purposes and cost control.