Checkers Corporation, which uses least-squares regression analysis, has derived the following regression equation for estimates of manufacturing overhead: Y = 495,000 + 5.65X. Which of the following statements is true if the primary cost driver is machine hours?
A)Total manufacturing overhead is represented by the variable "X."
B)"Y" is commonly known as the independent variable.
C)"X" is commonly known as the dependent variable.
D)"X" represents total manufacturing overhead.
E)The company anticipates $495,000 of fixed manufacturing overhead.

Question

Quizplus · Accepted Answer

The equation Y = 495,000 + 5.65X indicates that $495,000 is the fixed component of manufacturing overhead, which does not change with machine hours.

Checkers Corporation, Which Uses Least-Squares Regression Analysis, Has Derived the Following