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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
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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x+2y+3z=6 2x+4y+z=7 3x+2y+9z=14
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CONTINUOUS PROBABILITY DISTRIBUTION (USE OF NORMAL DISTRIBUTION) In reality the C-V-P variables might take any values in a continuous range. It could therefore be more appropriat
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