MA Ch-12 Regression Analysis

The line of best fit (y = a + bx) is being estimated using regression analysis on five pairs of data. The results from the regression analysis are as follows:

∑x= 14

∑y= 36

∑xy= 109

∑x²= 50

What is the value of 'b' in the equation for the line of best fit?

• 1. −0.02

• 1. 0.76

• 1. 2.71

• 1. 214

The following results were obtained when analysing two separate variables:

∑x=14

∑y=36

∑xy=109

∑x²=50

∑y²=294

n=5

What is the value of the coefficient of determination?

• 1. 0.18

• 1. 0.42

• 1. 0.64

• 1. 2.38

Regression analysis is being used to find the line of best fit (y = a + bx) from eleven pairs of data. The calculations have produced the following information:

Σx = 440,

Σy = 330,

Σx² = 17,986,

Σy² = 10,366

Σxy = 13,467

What is the value of “a” in the equation for the line of best fit (to 2 decimal places)?

• 1. 0.63

• 1. 0.69

• 1. 2.33

• 1. 5.33

Regression analysis is being used to find the line of best fit (y = a + bx) from eleven pairs of data. The calculations have produced the following information:

Σx = 440,

Σy = 330,

Σx² = 17,986,

Σy² = 10,366

Σxy = 13,467

1. What is the value of “a” in the equation for the line of best fit (to 2 decimal places)?

• 1. 0.63

• 1. 0.69

• 1. 2.33

• 1. 5.33

Which TWO of the following statements about the use of linear regression analysis in cost estimation are true?

• 1. It provides more accurate estimates than the high low technique

• 1. It can only be used to estimate variable cost

• 1. It assumes that cost behaviour is linear

• 1. It only takes into account two observations of cost and output

A firm has used linear regression analysis to establish the relationship between total cost and activity in units.

What does the slope of the regression line represent?

• 1. Variable cost per unit

• 1. Fixed cost per unit

• 1. Average cost per unit

• 1. Total variable costs

Which of the following statements is a limitation of linear regression analysis?

• 1. It can be used to forecast costs and revenues

• 1. It is easy to model on a spreadsheet

• 1. It assumes that past relationships between dependent and independent variables will continue into the future

• 1. If the relationship between two variables is causative, then as the independent variable changes, so too will the dependent variable

The following statements relate to the advantages that linear regression analysis has over the high low method in the analysis of cost behaviour:

1. the reliability of the analysis can be statistically tested

3. 1. it takes into account all of the data

4. 2. it assumes linear cost behaviour

Which of the above statements are TRUE?

• 1. 1 only

• 1. 1 and 2 only

• 1. 2 and 3 only

• 1. 1, 2 and 3

Which TWO of the following statements about the use of linear regression analysis in cost estimation are true?

• 1. It provides more accurate estimates than the high low technique

• 1. It can only be used to estimate variable cost

• 1. It assumes that cost behaviour is linear

• 1. It only takes into account two observations of cost and output

Which of the following statements is a limitation of linear regression analysis?

• 1. It can be used to forecast costs and revenues

• 1. It is easy to model on a spreadsheet

• 1. It assumes that past relationships between dependent and independent variables will continue into the future

• 1. If the relationship between two variables is causative, then as the independent variable changes, so too will the dependent variable