In the Simple Linear Regression Model Y_i = β₀

question 14

Multiple Choice

In the simple linear regression model Y_i = β₀ + β₁X_i + u_i,

• A)the intercept is typically small and unimportant.
• B)β₀ + β₁X_i represents the population regression function.
• C)the absolute value of the slope is typically between 0 and 1.
• D)β₀ + β₁X_i represents the sample regression function.

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Definitions:

Standard Costs

Predetermined costs for materials, labor, and overhead used as a benchmark for evaluating actual production costs.

Factory Overhead Cost Variance

The difference between the actual factory overhead costs incurred and the expected (or budgeted) overhead costs based on standard cost accounting.

Flexible Factory Overhead Budget

A budget that adjusts overhead costs in response to changes in actual production or activity, allowing for more accurate costing.

Direct Materials Price Variance

The difference between the actual price and the standard price of direct materials multiplied by the actual quantity of direct materials used in producing a product.