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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 ≤ 1If r= -1, then the two variables are said to be perfectly negatively correlatedIf r = +1, then the two variables are perfectly positively correlatedIf r = 0, then there is no correlation between the two variables.
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IF net income totaled $18,000 for one year, beginning assets were $100.000 and ending assets were $140,000, then Return on Assets for the year as a percentage will be?
accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;
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During 2010, Jackson Company estimated that its manufacturing employees would work 80,000 direct labor hours. During the year the company actually worked 75,000 direct labor hours.
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