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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
Incremental budgeting This is used to describe an incremental cost approach to budgeting where the next period budget is based on the current year’s results plus an extra amou
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Computation of Working Capital Required 1. Operating Cycle Period = M+W+F+D-C = 101.38 +2
Costing Cost accounting can be described as the collection, interpretation of cost and assignment. In succeeding chapters, you will learn about alternative costing techniq
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