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

Management decision making, Decision-making is an integral part of all ...

Decision-making is an integral part of all management functions. It is the process of choosing the among alternative courses of action. Managers have to

Feedback control system, Feedback Control System Feedback is informatio...

Feedback Control System Feedback is information about actual achievements or actual results produced within the organization (e.g. management control reports) with the purpose

What is programmer budgeting, What is Programmer budgeting It is a comb...

What is Programmer budgeting It is a combination of programming and systems refers to the activity and system analysis refers to cost benefit analysis or operations research. I

Market value-transfer pricing methods, Market value There is universal ag...

Market value There is universal agreement that in competitive markets a market value based transfer price should achieve optimal results. In this circumstance, it can be expected

Describe the selling costs and development costs, Describe the Selling cost...

Describe the Selling costs and Development costs Selling costs: These are costs of seeking to create and stimulate demand (sometimes termed as marketing) and securing orde

TOTAL PRODUCTIVE MAINTENANCE, Identify the ways in which Total Productive M...

Identify the ways in which Total Productive Maintenance could be applied as part of a manufacturing organisation''s quality programme

Working capital management, A managerial accounting strategy focusing mainl...

A managerial accounting strategy focusing mainly on maintaining efficient levels of both components of working capital that is current assets and current liabilities, with respect

Suppliers line of credit, In this scheme, non-revolving line of credit is e...

In this scheme, non-revolving line of credit is extended to the seller to be utilized inside a stipulated period. Assistance is provided to manufactures for promoting sale of their

Questions., how long will it take to get answers after question are submitt...

how long will it take to get answers after question are submitted

Describe benchmarking, Describe Benchmarking It is the process of measu...

Describe Benchmarking It is the process of measuring products service or activities against the best level of performance which may be found either inside or outside the organi

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