Regression Analysis Was Applied Between Sales (In $1000) and Advertising

question 25

Multiple Choice

Regression analysis was applied between sales (in $1000) and advertising (in $100) and the following regression function was obtained.  500 + 4x Based on the above estimated regression line if advertising is $10,000, then the point estimate for sales (in dollars) is

• A)$900
• B)$900,000
• C)$40,500
• D)$505,000

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Definitions:

First-In, First-Out

An inventory valuation method where the oldest items are sold or used first.

Equivalent Units

A concept in cost accounting used to assess work-in-process inventory by converting partial units into a number of equivalent full units.

Ending Inventory

The worth of merchandise ready for purchase at the close of a financial period, determined by adding purchases to the initial inventory and then subtracting the cost of goods that were sold.

First-In, First-Out Method

An inventory valuation method where the earliest items added to inventory are the first ones considered sold.