How Would We Interpret the Coefficient of Determination R²

question 152

Multiple Choice

How would we interpret the coefficient of determination R²?

• A)Approximately 46% of the time,the dollar value of the loans is determined by these three variables.
• B)Approximately 46% of the observations lie within 1 standard deviation of the regression line.
• C)Approximately 46% of the variation in the total dollar amount of loans can be explained by the variation in these three variables.
• D)Approximately 46% of the total dollar amount of loans is explained by these three variables.

---

Definitions:

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities and resources that go into producing them.

Overapplied

A situation where the allocated costs exceed the actual costs incurred.

Underapplied

Refers to a situation where the allocated costs are less than the actual costs incurred.

Factory Overhead

The indirect costs of manufacturing, such as salaries of quality control personnel and depreciation of factory equipment.