The results of a least squares regression to separate the monthly utilities cost into its fixed and variable components were as follows:
Y = 5,472 + .036 X
X = the number of units produced
R2 = .735
Which of the following statements is not true of the cost model?
A) Y represents the total semi-variable cost.
B) The total monthly fixed utilities costs are $5,472.
C) Y is referred to as the independent variable.
D) The equation would be represented as a straight line on a graph.
Correct Answer:
Verified
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