A(n) __________ Means That When One Variable Increases, the Other

question 226

Multiple Choice

A(n) __________ means that when one variable increases, the other increases as well; a(n) __________ means that when one variable increases, the other decreases.

• A)positive correlation; negative correlation
• B)negative correlation; positive correlation
• C)additive correlation; subtractive correlation
• D)subtractive correlation; additive correlation

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Definitions:

Residual Income

The income that remains after subtracting all required costs of capital from operating profit, a measure of profitability.

Activity Base

A measure used to allocate costs in activity-based costing, reflecting the level of effort or consumption of resources.

Service Departments

Units within an organization that support other departments but do not directly contribute to revenue generation, such as IT and HR.

Profit Margin

A financial ratio indicating the percentage of revenue that remains as profit after accounting for the cost of goods sold and other expenses; a measure of profitability.