Oil Quality and Price Narrative

question 104

Essay

Oil Quality and Price Narrative
Quality of oil is measured in API gravity degrees; the higher the degrees API, the higher the quality. The table shown below was produced by an expert in the field who believes that there is a relationship between quality and price per barrel. A partial MINITAB output follows:
Descriptive Statistics Covariances
Degrees Price
Degrees 21.281667
Price 2.026750 0.208833
Regression Analysis S = 0.1314 R-Sq = 92.46% R-Sq(adj) = 91.7%
Analysis of Variance
-Refer to Oil Quality and Price Narrative. Does it appear that random variables is a ? Explain.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders, based on a cost driver, calculated before the period begins.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including utilities, rent, and salaries for managers.

Predetermined Overhead Rates

An estimated rate used in cost accounting to allocate overhead costs to products or services based on a set formula.

Machine-Hours

A measurement of the amount of time a machine is operated, used in allocating costs or determining production levels.