Smith Products Has Determined That the Number of Machine Hours

question 43

Multiple Choice

Smith Products has determined that the number of machine hours worked (MH) drives the amount of manufacturing overhead incurred (MOH) . On the basis of this relationship, a staff analyst has constructed the following regression equation: MOH = $240,000 + 8MH. Which of the choices correctly depicts the nature of Smith's variables? $\begin{array} { | l | l | l | l | } \hline & \text { Dependent } & & \text { Independent } \\\hline 1 & \mathrm { MOH } & & \mathrm { MOH } \\\hline 2 & \mathrm { MOH } & & \mathrm { MH } \\\hline 3 & \mathrm { MH } & & \mathrm { MOH } \\\hline 4 & \mathrm { MH } & & \mathrm { MH } \\\hline 5 & 8 & & 240.000 \\\hline\end{array}$

• A)1
• B)2
• C)3
• D)4
• E)5

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Definitions:

Work Effect

The impact on labor supply and productivity due to changes in economic policies or conditions.

Basic Assumption

An underlying principle or idea that is accepted as true without proof, forming the basis for further reasoning or behavior.

Level Of Investment

The amount of spending by businesses on capital goods, such as factories and machinery, which can influence economic growth.

Keynes

Refers to John Maynard Keynes, an economist famous for his ideas that in times of low demand, public sector investments are critical to economic stability and growth.