Brewsky's Is a Chain of Micro-Breweries In a Regression Equation Expressed as Y = a

question 39

Multiple Choice

Brewsky's is a chain of micro-breweries.Managers are interested in the costs of the stores and believe that the costs can be explained in large part by the number of customers patron­izing the stores.Monthly data regarding customer visits and costs for the preceding year for one of the stores have been entered into the regression analysis and the analysis is as follows:
$$\begin{array} { | l | r | } \hline \text { Average monthly c ustomer-visits } & 1,462 \\\hline \text { Average monthly total costs } & \$ 4,629 \\\hline \text { Regression Results } & \\\hline \text { Intercept } & \$ 1,496 \\\hline \text { bcoefficient } & \$ 2.08 \\\hline R ^ { 2} & 0.86814 \\\hline\end{array}$$
In a regression equation expressed as y = a + bx,how is the letter b best described? (CMA adapted)

• A) An estimate of the probability of return customers.
• B) The fixed costs per customer-visit.
• C) The estimate of the cost for an additional customer visit.
• D) The proximity of the data points to the regression line.

Understand the concept of opportunity cost and its significance in managerial decision making.

Understand the importance and components of responsibility accounting in decentralized organizations.

Recognize the role of performance measurement and goal congruence in achieving organizational objectives.

Understand the interplay between cost-based and market-based transfer pricing methods.

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