A Fitted Regression Profit = 262 + 1

question 97

Multiple Choice

A fitted regression Profit = 262 + 1.51 Sales (all variables in thousands of dollars) was estimated from a random sample of 15 small coffee kiosks. We can say that:

• A)the slope is too small to be significant.
• B)the intercept does not seem reasonable.
• C)the R² will be low due to small sample size.
• D)predictions are likely to be underestimated.

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Definitions:

Raw Materials Price Variance

A measure of the difference between the actual cost of raw materials and the expected (standard) cost.

Labor Efficiency Variance

The difference between the budgeted and actual hours worked, multiplied by the standard labor rate, indicating efficiency in labor usage.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (standard) variable overhead rate multiplied by the actual activity level.

June

The sixth month of the year in the Gregorian calendar, often associated with the start of summer in the northern hemisphere.