Flashcards in M1-Projection and Forecasting Techniques: Part 1 Deck (11):

1

## A regression equation is a statistical model that estimates the dependent variables based on changes in the independent variable. (true or false)

### true

2

## R-squared is the coefficient of determination and is the proportion of the total variation in a dependent variable (y) explained by the independent variable (x). (true or false)

###
true

The p-value is a statistical measure of the likelihood that tested data could have occurred by chance.

The standard error is a measure of the standard deviation or average variability of a sampling distribution.

The t-statistic is used in hypothesis testing and the computation of confidence levels.

3

## Regression analysis can be used to separate costs into fixed and variable components by means of least squares. This method mathematically fits a trend line to minimize the distance between the trend line and the actual observations. (true or false)

### true

4

## The intercept value is the point at which the behavior of the independent variable (production) stated in terms of the dependent variable (cost) intercepts the y axis. (true or false)

### true

5

## Learning curve analysis is used to determine increases in efficiency or production as experience is gained. Both products have long production runs, making learning curve analysis the best method for estimating the cost of the competitive bid. (true or false)

### true

6

## Expected value analysis represents the long-term average of repeated trials and is found by multiplying the probability of each outcome by its payoff and then summing the results. (true or false)

### true

7

## Continuous probability simulation is a procedure that studies a problem by creating a model of the process and then, through trial and error solutions, attempts to improve the problem solution. (true or false)

### true

8

## A coefficient of correlation equal to 1, the positive measure would reflect the strong direct relationship assumed in cost volume planning analysis, where total variable costs increase proportionally with volume. (true or false)

###
true

A coefficient of correlation of 0 indicates no relationship between costs and volume. We would expect this relationship for fixed costs, not variable costs.

A coefficient of correlation of -1.0 indicates a perfect inverse relationship. This would imply that costs go down as volume increases. In the relevant range, costs and volume are expected to increase (not decrease) proportionately.

9

## The coefficient of determination (R2)-that is R squared but can't make that happen on this software..... is the proportion of the total variation in the dependent variable (y) explained by the independent variable (x). (true or false)

### true

10

## The coefficient of determination measures the proportion of the total variation in the dependent variable (y) explained by the independent variable (x). The greater this proportion is, the better the "fit" of the regression equation linking the two variables. (true or false)

### true

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