The Equation for a Simple Linear Regression That Saw Sales

question 32

Multiple Choice

The equation for a simple linear regression that saw sales averaging $225,000 over the last ten periods,and advertising budgets averaging $3,000 over the last 10 periods is:
Y = 3250 + 120x
This indicates that a $1 increase in advertising will increase sales by:

• A)$3370
• B)$250
• C)$120
• D)$1875

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Definitions:

Spending Variance

The difference between the actual amount spent and the budgeted amount for a particular period or category in financial management.

Customers Served

A metric indicating the number of customers a business has provided products or services to within a specific time period.

Total Expenses

The sum of all costs and expenses incurred by a business or individual in a given period.

Spending Variance

The variance between the budgeted and the actual expenditure in a given category or time frame.