Each Deviation in the Numerator for Variance Is Squared Because

question 30

Multiple Choice

Each deviation in the numerator for variance is squared because

• A)without squaring each deviation,the solution for SS would be zero
• B)this inflates the value for variance,making it more accurate
• C)without squaring each deviation,the solution could be negative
• D)both A and C

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Definitions:

Contribution Margin Ratio

The contribution margin ratio is the percentage of each sales dollar remaining after deducting variable expenses, indicating how much of each dollar contributes to fixed expenses and profit.

Operating Leverage

An indicator of the way in which growth in revenue results in an increase in operating profit, revealing the ratio of fixed to variable expenses within a business.

Net Operating Income

The total profit of a company after operating expenses are deducted, but before taxes and interest payments.

Sales Increase

It refers to the upward change in the number of products sold or the value of sales over a specific period.