A Fundamental Distinction Between Trend Projection and Linear Regression Is

question 101

Multiple Choice

A fundamental distinction between trend projection and linear regression is that:

• A) trend projection uses least squares while linear regression does not.
• B) only linear regression can have a negative slope.
• C) in trend projection the independent variable is time; in linear regression the independent variable need not be time, but can be any variable with explanatory power.
• D) trend projection can be a function of several variables, while linear regression can only be a function of one variable.
• E) trend projection uses two smoothing constants, not just one.

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the quantity expected, multiplied by the standard cost per unit.

Standard Quantity

The expected amount of materials or input needed to produce a unit of output.

Actual Materials

The actual amount of materials used in the production process, measured in physical units or cost.

Standard Price

A predetermined cost for a unit of material, labor, or overhead anticipated in the budgeting process, against which actual costs are compared.