The Squeaky Division of Household Products Corporation Showed a Net

question 5

Multiple Choice

The Squeaky Division of Household Products Corporation showed a net loss of £5,000,000 last year, but Squeaky's manager received a bonus for outstanding performance. Why would Household Products' management control system appropriately allow for this apparent inconsistency?

• A) Economic factors outside the manager's control caused the loss.
• B) Household Products' management control system is ineffective.
• C) The bonus represents a payoff to Squeaky's manager to keep her quiet about the loss.
• D) The loss was due to controllable factors.

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Definitions:

Direction

In statistics, it often refers to the nature of the relationship between variables, indicating whether they move together in a positive or negative correlation.

Pearson Correlation

A measure of the linear correlation between two variables, giving a value between -1 and 1.

Linearity

The attribute of a relationship between two variables where the change in the outcome is directly proportional to the change in the predictor.

Predictability

The extent to which future states or conditions of a system can be forecasted based on existing data or patterns.