MULT30018 Study Guide - Quiz Guide: Linear Regression, Regression Analysis
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Question 1
Which of the following approaches to understanding and predicting consumer behavior depends primarily on the knowledge and experience of a firm's employees and its suppliers?
Test marketing and price experiments | ||
Analysis of historical data. | ||
Direct consumer surveys. | ||
Expert opinion. |
Question 2
In which of the following situations would reliance on expert opinion as a basis for a managerial decision be most preferred?
When the product being marketed is relatively new. | ||
When the level of economic activity can have a significant effect on the demand for the firm's output. | ||
When the product can be packaged with a variety of price and quality combinations. | ||
When the business in question serves as a supplier of inputs to other businesses, especially in multi-product situations where other strategies may be prohibitively expensive. |
Question 3
The approach to analyzing consumer behavior that asks consumers to rank and choose among different product attributes to reveal their relative valuation of different characteristics is called:
conjoint analysis. | ||
contingent valuation. | ||
the hedonic estimation technique. | ||
a direct consumer survey. |
Question 4
All of the following are limitations of direct consumer surveys except:
the possibility of response biases because survey respondents may not want to reveal their true preferences. | ||
the possibility that the type of questions asked may unintentionally bias the respondent's answers. | ||
the likelihood that respondents will deliberately and systematically mislead interviewers. | ||
the possibility that consumers' responses may not reflect their actual behavior in the market place. |
Question 5
Which of the following approaches to understanding and predicting consumer behavior does not actually solicit any information from potential customers?
Expert opinion. | ||
Test marketing. | ||
Analysis of historical data. | ||
Conjoint analysis. |
Question 6
Data collected on a sample of individuals with different characteristics at a specific point in time are called:
panel data. | ||
cross-section data. | ||
time series data. | ||
none of the above. |
Question 7
Which of the following approaches to understanding and predicting consumer behavior provides the most insight into how consumers can be expected to respond in an actual market setting?
Test marketing. | ||
Conjoint analysis. | ||
Expert opinion. | ||
Analysis of historical data. |
Question 8
An approach to analyzing consumer behavior in which consumer reaction to different prices is analyzed in a laboratory situation or a test market is called:
non-price experiments. | ||
focus groups. | ||
price experiments. | ||
none of the above. |
Question 9
Data collected on the same observation unit at a number of points in time are called:
panel data. | ||
time series data. | ||
cross-section data. | ||
none of the above. |
Question 10
A measure of how much the coefficient would vary in regressions based on different samples is called:
F-statistic. | ||
standard error of the estimated coefficient. | ||
t-statistic. | ||
partial F-statistic. |
Question 11
The test statistic used to test the hypothesis of whether a regression coefficient is significantly different from zero, holding all other independent variables constant, is called a(n):
t-test. | ||
F-test. | ||
multicollinearity test. | ||
autocorrelation test. |
Question 12
Regression analysis that analyzes the relationship between one dependent variable and several independent variables is called:
cluster analysis. | ||
correlation analysis. | ||
multiple regression analysis. | ||
simple regression analysis. |
Question 13
The ratio of the regression coefficient to its standard error is called:
F-statistic. | ||
t-statistic. | ||
coefficient of determination. | ||
partial F-statistic. |
Question 14
The coefficient of determination will range between what values?
-1 and +1 | ||
0 and 1 | ||
-3 and +3 | ||
none of the above |
Question 15
The range of values in which we can be confident that the true regression coefficient lies within a given degree of probability is called a:
confidence interval. | ||
logistic regression. | ||
prediction interval. | ||
none of the above. |
Question 16
The estimated regression equation is Y = 10 + 2.5X, if X =0 than the predicted value of Y is equal to
2.5 | ||
7.5 | ||
12.5 | ||
10 |
I got the first question. I am having trouble on questions5.
The answer for what regression equation to use for Question 1is:
Overhead = 1,732.06012 + 81.92799 * Number of Setups + 4.21711 *Machine Hours
Sorrentino Company, which has been in business for one year,manufactures specialty Italian pastas. The pasta products start inthe mixing department, where durum flour, eggs, and water are mixedto form dough. The dough is kneaded, rolled flat, and cut intofettucine or lasagna noodles, then dried and packaged.
Paul Gilchrist, controller for Sorrentino Company, is concernedbecause the company has yet to make a profit. Sales were slow inthe first quarter but really picked up by the end of the year. Overthe course of the year, 717,500 boxes were sold. Paul is interestedin determining how many boxes must be sold to break even. He hasbegun to determine relevant fixed and variable costs and hasaccumulated the following per unit data:
Price $0.95
Direct materials 0.35
Direct labor 0.25
He has had more difficulty separating overhead into fixed andvariable components. In examining overhead-related activities, Paulhas noticed that machine hour appear to be closely correlated withunits in that 100 boxes of pasta can be produced per machine hour.Setups are important batch-level activity. Paul also thinks thatindirect labor hour may be associated with the overhead expense,but there is no evidence showing the relation. Currently, indirectlabor hour is scheduled to be 2000 hours per year. Paul hasaccumulated the following information on overhead costs, number ofsetups, machine hours, and indirect labor hours for the past 12months. Month | Overhead | Number of Setups | Machine Hours | Indirect Labor Hours |
January | $5,700 | 18 | 595 | 155 |
February | 4,500 | 6 | 560 | 135 |
March | 4,890 | 12 | 575 | 125 |
April | 5,500 | 15 | 615 | 200 |
May | 6,320 | 20 | 680 | 240 |
June | 5,100 | 10 | 552 | 183 |
July | 5,532 | 16 | 630 | 205 |
August | 5,409 | 12 | 600 | 115 |
September | 5,300 | 11 | 635 | 162 |
October | 4,950 | 12 | 525 | 145 |
November | 5,350 | 14 | 593 | 185 |
December | 5,600 | 14 | 615 | 150 |
Selling and administrative expenses, all fixed, amounted to$200,000 last year.
In the second year of operations, Sorrentino Company has decidedto expand into the production of sauces to top its pastas. Saucesare also started in the mixing department, using the sameequipment. The sauces are mixed, cooked, and packaged into plasticcontainers. One jar of sauce is priced at $2 and required $0.65 ofdirect materials and ACC320 Group Project 1âCVP and RegressionAnalysis
$0.45 of direct labor. 60 jars of sauce can be produced permachine hour. The production manager believes that with carefulscheduling, he can keep the total number of setups and total numberof indirect labor hours (for both pasta and sauce) to the samenumber as used last year. The marketing director expects toincrease selling expense by $30,000 per year to promote the newproduct and believes Sorrentino Company can sell three boxes ofpasta for every one jar of sauce.
Required:
1. Separate overhead into fixed and variable components usingregression analysis. Run seven regressions by using differentcombinations of three independent variables: number of setups,machine hours, and indirect labor hours. These seven regressionsare: a) three simple regressions; b) three multiple regressionsusing two independent variables; c) multiple regression using allindependent variables. Which regression equation is the best?Why?
Now, the best regression equation is chosen, use it to answerthe following questions:
2. Calculate the number of boxes of pasta which must be sold tobreak even before the expansion into the production of sauces.
3. Now consider the production of sauces, calculate thebreak-even number of boxes of pasta and jars of sauce.
4. Suppose that the production manager is wrong and that thenumber of setups doubles. Calculate the new break-even number ofboxes of pasta and jars of sauce.
5. Refer to the original data. Suppose that only 40 jars ofsauce can be produced per machine hour and that Sorrentino Companywill sell two boxes of pasta for every one jar of sauce. Calculatethe new break-even number of boxes of pasta and jars of sauce.
6. Comment on the effects of the shift in sales mix anduncertainty in the cost estimation on the break-even points forSorrentino Company.