The metric that evaluates the magnitude of the standard error relative to the estimated coefficient's value is called __________?
Show answer Hide answer
Answer: A. t-value
Explanation
The t-value evaluates the size of the standard error relative to the value of the estimated regression coefficient. It determines whether an independent variable has a statistically significant relationship with the dependent variable. Higher absolute t-values indicate stronger statistical confidence in the coefficient. In regression analysis, the t-value is calculated by dividing the estimated coefficient by its standard error. Statisticians compare this calculated value against critical values from a t-distribution table. This comparison helps test hypotheses regarding the true population parameters.
Cost analysts use t-values when building cost estimation formulas using historical data. If a cost driver has a low t-value, it suggests the driver is not a reliable predictor of costs. Ensuring high statistical significance prevents companies from relying on flawed cost estimation models. B-value is an informal label sometimes used for regression slopes but lacks the specific error-ratio definition. D-value and c-value are not standard statistical metrics used to evaluate regression coefficient standard errors.
- Subject
- Accounting and Finance
- Category
- Accounting
- Topic
- —
- Difficulty
- medium
Related questions
Q1. Subtracting total revenues from total variable costs calculates ___________?
Show answer Hide answer
Answer: C. contribution margin
Contribution margin is calculated by subtracting total variable costs from total revenues. This figure reveals the amount of revenue remaining to cover fixed costs and generate operating income. It highlights how sales v...
Q2. A corporate plan that quantifies projected cash flows, net income, and financial position is known as ___________?
Show answer Hide answer
Answer: A. budget
A budget is a quantitative corporate plan that outlines projected cash flows, net income, and overall financial position. It translates strategic goals into concrete financial forecasts for a specific future period. This...
Q3. Spoilage that is deemed controllable and preventable under efficient operating conditions is termed _____________?
Show answer Hide answer
Answer: A. abnormal spoilage
Abnormal spoilage exceeds what is expected under efficient operating conditions and is considered controllable and preventable. Management tracks this specific type of waste because it signals operational inefficiencies...
Q4. Expenses that cannot be directly traced to specific products but are necessary to sustain the overall organization are categorized as ___________?
Show answer Hide answer
Answer: B. facility sustaining costs
Facility sustaining costs are overhead expenses that cannot be directly traced to specific products but are required to support the entire organization. Examples include factory depreciation, security, and general plant...
Q5. A relationship describing how fluctuations in a cost driver lead to variations in total cost is termed ___________?
Show answer Hide answer
Answer: B. economic plausibility
Economic plausibility refers to a logical relationship demonstrating how changes in a cost driver result in changes to total costs. It requires a sound cause-and-effect rationale before establishing a mathematical cost f...
Q6. The maximum possible production output achievable under conditions of perfect efficiency is called __________?
Show answer Hide answer
Answer: D. theoretical costing
Theoretical capacity represents the maximum possible output attainable under perfect operating conditions with no interruptions.