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

Queuing problems, Queuing problems There are two main approaches to que...

Queuing problems There are two main approaches to queuing problems: •    simulation •    queuing theory formula Where simple situations apply, queuing theory should be used

Multistage decision making under risk, Multi-stage decision making under ri...

Multi-stage decision making under risk (The use of decision trees) Sequencing is concerned with the selection of an appropriate sequence or order of performing a series of jobs

Time series, How to solve a Time Series problem for a five year period

How to solve a Time Series problem for a five year period

How does that relate to the modern epidemic on obesity, Why is corn so freq...

Why is corn so frequently used in typical American foods? In what forms does it take when being part of those foods? How does that relate to the modern epidemic on obesity?

What is replacement cost, Replacement cost It is the cost of replacing ...

Replacement cost It is the cost of replacing a material or asset, by purchase from the current market. If an X material was originally purchased @ Rs. 250 per Kg. And know i

Explain the techniques of performance budgeting, Explain the techniques of ...

Explain the techniques of performance budgeting It will also be useful to examine the three major aspects of this technique: Structural aspects : the structural aspects inv

Linear programming, what areas can linear programming be applied in manager...

what areas can linear programming be applied in managerial accounting?

Managerial decision, Explain the practical application of differential cost...

Explain the practical application of differential costing with examples

Explain the cost oriental pricing policy, Cost oriental pricing policy ...

Cost oriental pricing policy Cost of production of a product is the most important variable and most important determinant of its price. There may type of costs such as-fixe

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