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

Prepare a revised performance report, Yuma foods acquire Aldo's tortillas s...

Yuma foods acquire Aldo's tortillas several years ago. Aldo's continued to operate as an independent company, except that Yuma foods has exclusive authority over capital investment

Cost advantage and value chain , Cost Advantage and Value Chain Cost a...

Cost Advantage and Value Chain Cost advantage is one of the two types of competitive advantage a firm may possess. Cost is also of vital significance to differentiation strate

Determine the creditors turnover ratio, Creditors turnover ratio ( or payab...

Creditors turnover ratio ( or payables turnover ratio) Meaning: this ratio establishes a relation ship between net credit purchases and average trade creditors. Objective

Cost concept, Cost concept . techniques of costing . absorption costing

Cost concept . techniques of costing . absorption costing

Depreciation, How to calculate straight line depreciation for a partial yea...

How to calculate straight line depreciation for a partial year i.e. Refurb. depreciation starts in may till end of 8 year lease. Therefore its 7.666 years

Private sector companies have multiple stakeholders who are, Private sector...

Private sector companies have multiple stakeholders who are likely to have divergent interests.( five stakeholder groups and discuss their financial and other objectives).

Bugeting, PART 1 Carlton Ltd operates at capacity and makes glass-topped d...

PART 1 Carlton Ltd operates at capacity and makes glass-topped dining tables and wooden chairs which are then typically sold as sets of four chairs with one table. However, some c

What is sealed bid pricing, What is Sealed bid pricing Another from of ...

What is Sealed bid pricing Another from of competition oriented pricing is the sealed bid pricing. In a large number of projects, industrial marketing and marketing to the gove

Explain variable cost and fixed cost, Explain variable cost and fixed cost ...

Explain variable cost and fixed cost Variable costs: costs that vary almost in the direct proportion to the volume of production are known as variable costs. The examples of

Various types of short term investment opportunities, The subsequent short-...

The subsequent short-term investment opportunities are obtainable to companies in India to invest their temporary cash excess. a) Treasury Bills: Treasury Bills are short-term

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