Chesley Corporation,which Uses Least-Squares Regression Analysis,has Derived the Following Regression

question 38

Multiple Choice

Chesley Corporation,which uses least-squares regression analysis,has derived the following regression equation for estimates of manufacturing overhead: Y = 495,000 + 5.65X.Which of the following statements is true if the primary cost driver is machine hours?

• A)Total manufacturing overhead is represented by the variable "X."
• B)The company anticipates $495,000 of fixed manufacturing overhead.
• C)"X" is commonly known as the dependent variable.
• D)"X" represents the number of machine hours.
• E)Both "B" and "D" are truE.

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Definitions:

Adjustments

Modifications made to financial statements or data to correct inaccuracies or allocate revenues and expenses.

Free Cash Flow

The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets, indicating the financial health and profitability of a company.

EBIT

Earnings Before Interest and Taxes, a measure of a company's operating performance that excludes interest and income tax expenses.

Working Capital

Working capital is the difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of a company.