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Testing the Slope
The strong point of the relationship among the dependent variable and each of the independent variables can be determined using 3 methods:
1) Correlation coefficient (r): Correlation coefficient measures the degree of association between two variables such as the cost and the activity level.2) Standard error of the slope (Sb): Correlation coefficient measures the degree of association between two variables such as the cost and the activity level.3) Z or t statistics:
If n ≥30 we use Z, if, n < 30 we use t statistics. These statistics can be used to test the hypothesis:
Ho: B = O that is, there is no relationship between X and YHA: B≠ O There is a significant relationship between X and Y
contribution margin
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Western States Supply, Inc. (WSS), consists of three divisions—California, Northwest, and Southwest—that operate as if they were independent companies. Each division has its own sa
Z or t Statistics If n ≥30 we use Z, if, n Ho: B = O that is, there is no relationship between X and Y HA: B≠ O There is a significant relationship between X and Y The l
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