Delreal Inc.'s Inspection Costs Are Listed Below

question 7

Multiple Choice

Delreal Inc.'s inspection costs are listed below:
Management believes that inspection cost is a mixed cost that depends on the number of units produced. Using the least-squares regression method, the estimates of the variable and fixed components of inspection cost would be closest to:

• A) $20.27 per unit plus $5,905 per month
• B) $44.44 per unit plus $10,867 per month
• C) $20.68 per unit plus $5,807 per month
• D) $20.57 per unit plus $5,837 per month

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Definitions:

Factor Analysis

A statistical method used to identify underlying variables, or factors, that explain the pattern of correlations among multiple observed measures.

Empirically Derived Testing

A method of creating assessment tools based on data collected from experiments or observations, as opposed to theory-based methods.

Projective Testing

A psychological assessment tool that uses ambiguous stimuli to elicit responses that reveal aspects of an individual’s personality.

Personality Trait

enduring characteristics or qualities that describe an individual's behavior across different situations.