Figure 3-7
The following computer printout estimated overhead costs using regression:
Please find the following statistical table
During the last accounting period 10,000 DLH were worked
.
-Refer to Figure 3-7. The coefficient of determination in this model tells us that
A) the slope is 14.05.
B) the intercept is 100.41.
C) 80 percent of the variation in the overhead variable is explained by DLH.
D) the slope is significant.

Question

Figure 3-7
The following computer printout estimated overhead costs using regression:
   Please find the following statistical table
  During the last accounting period 10,000 DLH were worked
.
-Refer to Figure 3-7. The coefficient of determination in this model tells us that
A) the slope is 14.05. 
B) the intercept is 100.41. 
C) 80 percent of the variation in the overhead variable is explained by DLH. 
D) the slope is significant.

Quizplus · Accepted Answer

The coefficient of determination, also known as R-squared, measures the proportion of variance in the dependent variable (overhead costs) that can be explained by the independent variable (DLH). In this case, the R-squared value is 0.80 (80%), indicating that 80% of the variation in overhead costs can be explained by DLH. The slope and intercept values are not determined by the R-squared value, and we cannot determine if the slope is significant without additional information.

Figure 3-7 The Following Computer Printout Estimated Overhead Costs Using Regression