When Is the Correlation Coefficient Zero

question 24

Multiple Choice

When is the correlation coefficient zero?

• A)never
• B)when there is no linear correlation
• C)when there is a perfect positive linear correlation
• D)when there is a perfect negative linear correlation

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Definitions:

Variable Cost

Expenses that vary directly with the level of production or sales, such as materials or labor.

Target Net Profit

Target net profit is the specific amount of net income that a company aims to achieve within a certain period, guiding pricing, cost management, and sales volume strategies.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit. This figure shows how much each unit contributes to covering fixed costs and generating profit.

Fixed Costs

Expenses that do not change in total as production volume increases or decreases, such as rent and salaries.