In a simple least-squares regression where X refers to the number of sales calls made by a sales department and Y refers to the monthly total cost of the sales department, the R-squared in the regression output would represent:
A)the estimated monthly total costs of the sales department.
B)the estimated monthly fixed costs of the sales department.
C)the estimated monthly variable costs per unit of the sales department.
D)the percent of variation in Y that is explained by X.

Question

Quizplus · Accepted Answer

The R-squared in the regression output represents the proportion of the variation in the dependent variable (Y) that is explained by the independent variable (X). Thus, it represents the percent of variation in Y that is explained by X, making option D the correct answer. Option A is incorrect because the estimated monthly total cost is represented by the intercept term, not R-squared. Option B is incorrect because R-squared does not provide information about fixed costs. Option C is incorrect because it does not represent the estimated monthly variable costs per unit, which would be represented by the slope of the regression line.

In a Simple Least-Squares Regression Where X Refers to the Number