In a regression analysis for estimating a cost function, t-statistics and their p-values do not provide information about:
A) Whether the cost and cost drivers are related
B) How confident we can be that the intercept or slope coefficients are different from zero
C) The amount of variation in cost that is explained by variation in the cost driver
D) Whether the cost is totally fixed, totally variable, or mixed

Question

Quizplus · Accepted Answer

T-statistics and their p-values are used to determine the statistical significance of the regression coefficients (intercept and slope), indicating whether there is a statistically significant relationship between the dependent and independent variables and how confident we can be that these coefficients are different from zero. They do not provide information about the proportion of variation in the dependent variable (cost) that is explained by the independent variable (cost driver); this is measured by the coefficient of determination (R-squared).

In a Regression Analysis for Estimating a Cost Function, T-Statistics