A cost accountant is developing a regression model to predict the total cost of producing a batch of printed circuit boards as a linear function of batch size (the number of boards produced in one lot or batch), production plant (Kitchener and Hamilton), and production shift (day and evening).In this model, "batch size" is ___.
A)a response variable
B)an indicator variable
C)a dependent variable
D)a qualitative variable
E)an independent variable

Question

Quizplus · Accepted Answer

Batch size is an independent variable in the regression model, as it is being used to predict the total cost of production. The dependent variable in this case would be the total cost of producing the batch of printed circuit boards. The production plant and production shift are indicator variables or qualitative variables, as they are being used to differentiate between the different plants and shifts but are not being used to predict the cost of production.

A Cost Accountant Is Developing a Regression Model to Predict