A Regression Analysis (Involving 45 Observations) Relating a Dependent Variable

question 66

Essay

A regression analysis (involving 45 observations) relating a dependent variable (y) and two independent variables resulted in the following information. = 0.408 + 1.3387x₁ + 2x₂
The SSE for the above model is 49.When two other independent variables were added to the model, the following information was provided. = 1.2 + 3.0x₁ + 12x₂ + 4.0x₃ + 8x₄
This latter model's SSE is 40.At a 5% significance level, test to determine if the two added independent variables contribute significantly to the model.

---

Definitions:

Physical Count

An inventory audit practice where a company manually counts all of its inventory at a certain point in time to verify stock levels and values.

Transit

The process or period of moving goods or people from one place to another.

FIFO Method

The First-In, First-Out method is an inventory valuation technique where the costs of the earliest goods purchased are the first to be recognized in cost of goods sold.

Earliest Units

The first units produced or acquired in a period, which are often accounted for differently in inventory costing methods.