Standard error of estimate , Managerial Accounting

Assignment Help:

Standard error of estimate (Se)

The coefficient of determination r2 gives us an indication of the reliability of the estimate of total cost based on the regression equation but it does not give us an indication of the absolute size of the probable deviations from the line established. This information can be obtained by calculating the standard error of estimate given by the following formula.

2106_se1.jpg

For computation purpose,

2384_se2.jpg


Where k is the no. of independent variables

The calculation of the standard error is necessary because the least square line was calculated from sample data. The other samples would most likely outcome in different estimates. Obtaining the least square calculation over all the possible observations that might occur would result in the calculation of the true least square line. The question is “How near does the sample estimate of least square line come to the accurate least square line.

 


Related Discussions:- Standard error of estimate

Importance of a budget, Importance of a budget A Budget is a plan expre...

Importance of a budget A Budget is a plan expressed in monetary terms. It is prepared prior to the budget period and may show income, expenses and the capital to be used i.e. a

What is the amount of liabilities, Find the value of the following: a.  ...

Find the value of the following: a.    If the total assets are Rs. 87,000 and the liabilities are Rs. 47,000, find out the amount of capital. b.    If the capital of propriet

Linear programming, Linear Programming     This section introduces the ge...

Linear Programming     This section introduces the general method called the simplex algorithm, which is designed to solve any linear program. The information that can be secured

Homework.., given the above data what would the breakeven in units and doll...

given the above data what would the breakeven in units and dollars be if u wanted a necessary after tax profit of $ 36,000 (assume a 30% tax rate ) units __________ ales dollars _

Line of credit, It is a commitment by a bank to lend a specific amount of f...

It is a commitment by a bank to lend a specific amount of funds on demand identifies the maximum amount of unsecured credit the bank will allow the customer to borrow at any time.

What are the disadvantages of budgetary control, What are the Disadvantages...

What are the Disadvantages of budgetary control 1) Uncertain future: the budgets are prepared for the future period. Despite best estimates made for the predictions may not

Schedule of non-discretionary data, Schedule of Non-discretionary Data: and...

Schedule of Non-discretionary Data: and tables, in a form that is readable and readily understood.  This worksheet is to be used to identify/capture the various non-discretionar

Special orders, Issa Company manufactures a personal computer designed for ...

Issa Company manufactures a personal computer designed for use in schools and markets it under its own label. Issa has the capacity to produce 25000 units a year but is currently p

Decision making, Trinco Ltd (Trinidad & Tobago-T&T) has been negotiating a ...

Trinco Ltd (Trinidad & Tobago-T&T) has been negotiating a contract with a potential customer in Jamaica. Before the negotiations started the Jamaican company agreed to pay $10,000

Estimate the total fixed cost, Question:   (a) For a business annual sa...

Question:   (a) For a business annual sales are Rs 50,000 and variable expenses are Rs 35,000 and fixed expenses are Rs 25,000. The owner wants to earn at least Rs 5,000 as pro

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