For a Simple Regression Analysis Model That Is Used to Allocate

question 101

Multiple Choice

For a simple regression analysis model that is used to allocate factory overhead, an internal auditor finds that the intersection of the line of best fit for the overhead allocation with the y-axis is $5,000. The slope of the line is .20. The independent variable, factory wages, amounts to $900,000 for the month. What is the estimated amount of factory overhead to be allocated for the month?

• A) $65,000.
• B) $180,000.
• C) $230,000.
• D) $92,500.
• E) $185,000.

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Definitions:

Inequalities

Mathematical statements that compare two expressions using inequality symbols, showing if one is less than, greater than, or not equal to the other.

Equivalent

Two expressions that have the same value or represent the same mathematical quantity.

Free-Falling Object

An object that is falling under the sole influence of gravity, with no forces like air resistance acting upon it.

Acceleration

The rate of change of velocity of an object with respect to time.