What Is the Relationship Between the Coefficient of Determination and the Correlation

question 72

Multiple Choice

What is the relationship between the coefficient of determination and the correlation coefficient?

• A) The larger the correlation coefficient, the larger the coefficient of determination.
• B) The larger the correlation coefficient, the smaller the coefficient of determination.
• C) The relationship between them would have a correlation coefficient of zero exactly.
• D) The larger the correlation coefficient, the more variance can be attributed to error or chance.

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Definitions:

Allocation Base

A measure of activity such as direct labor-hours or machine-hours that is used to assign costs to cost objects.

Manufacturing Overhead Cost

All manufacturing costs that are not directly associated with the production of a product, including indirect materials, indirect labor, and other expenses.

Departmental Overhead Rates

Specific rates used to allocate overhead costs to products or cost objects based on the expenses of different departments.

Allocation Base

A measure used to distribute costs among different departments, products, or activities, typically related to the amount of resources consumed.