Chapter 5

Question 1

Engineering estimate

Answer 1

Cost estimate based on measurement and pricing of the work involved in a task (focuses on new activities)

Question 2

Account analysis

Answer 2

Cost estimation method that calls for a review of each account making up the total cost being analyzed

Question 3

Relevant range

Answer 3

Activity levels within which a given total fixed cost or unit variable cost will be unchanged

Question 4

Scattergraph

Answer 4

Graph that plots costs against activity levels

Question 5

High-low cost estimation

Answer 5

Method to estimate costs based on two cost observations, usually at the highest and lowest activity levels

Question 6

Regression

Answer 6

Statistical procedure to determine the relation between variables

Question 7

Independent variable

Answer 7

X term, or predictor, on the right-hand side of a regression equation; activities

Question 8

Dependent variable

Answer 8

Y term or the left-hand side of a regression equation; the cost to be estimated

Question 9

Correlation coefficient

Answer 9

R, measures the proximity of the data points to the regression line

Question 10

Coefficient of determination

Answer 10

R^2, the proportion of the variation in Y explained by the right-hand side of the regression equation (X predictors)

Question 11

t-statistic

Answer 11

Used to test the significance of the coefficient (Estimated coefficient (b)/standard error)

Question 12

Adjusted R-squared

Answer 12

The correlation coefficient squared and adjusted for the number of independent variables used to make the estimate

Question 13

Learning phenomenon

Answer 13

The systematic relationship between the amount of experience in performing a new task and the time required to perform it