Correlation coefficient, Managerial Accounting

Assignment Help:

Correlation coefficient (r)

Correlation coefficient measures the degree of association between two variables such as the cost and the activity level.

r = nΣxy   -  Σx  Σy
     [nΣx2 – (Σx)2 ] [nΣy2  - (Σy)2]


When the degree of association among the two variables is very close then it would be almost possible to plot the observation on a straight line and r will be almost equal to one.

-1≤ r ≤ 1

If r= -1, then the two variables are said to be perfectly negatively correlated
If r = +1, then the two variables are perfectly positively correlated
If r = 0, then there is no correlation between the two variables.


Related Discussions:- Correlation coefficient

State material price variance, State Material price variance Difference...

State Material price variance Difference among standard price and the actual price of the material is the material price variance. This variance arises because of various facto

Case of variable quantity-discounts structures, The case of variable quanti...

The case of variable quantity discounts In practice, suppliers may offer different discounts for different quantities purchased. For illustration:    Segment        Quantity

Account analysis-high low method-cost estimation method, Account analysis (...

Account analysis (Inspection of accounts) method: This method requires that departmental managers and the accountant inspect each item of expenditure within the accounts for s

#titDescribe the "agency problem" and the Sarbanes-Oxleyle.., Discuss the d...

Discuss the dominant compensation philosophy, share value creation and the link between company size and executive pay. Solve Parmalat''s case, which may be found in reading No. 8.

Prepare an overhead analysis sheet, QUESTION 1: P A RT A You are...

QUESTION 1: P A RT A You are the Cost Accountant of an industrial concern and have been assigned the duty of preparing a cost accounting system. Initially it has been de

Advantages-disadvantages-standard costing, The advantages and disadvantages...

The advantages and disadvantages of standard costing The benefits for controlling having a standard costing system in operation can be summed up as follows; Cautiously pl

Invoice discounting or factoring, If a company creates sales to a number of...

If a company creates sales to a number of customers on credit terms this will have to wait for two or still three months before its debtors pay that they owe. It means that the deb

Managerial accounting, Gafat Engineering Ethio plc manufactures two types o...

Gafat Engineering Ethio plc manufactures two types of TV sets LCD and CRT both having only one model. The LCD and CRT television sets sell for $9000 and $5000, respectively. the co

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd