Name: _______________________________________________ Course & Section: ______________

Quiz 5 in Management Science: Linear Regression Analysis

Direction: Choose the best option among the given choices.

1. Linear regression is a linear approach to modelling the relationship between a dependent variable
and one or more independent variable. Which type of linear regression deals with one
independent variable and is used when we want to predict the value of a variable based on the
value of another variable?
a. Basic Linear Regression
b. Simple Linear Regression
c. Least Linear Regression
d. Multiple Linear Regression
e. Complex Linear Regression

2. The following data show the monthly sales of three coffee shops owned by ABC Corporation, and
the corresponding population of the cities where the coffee shops are located. The monthly sale
of the first coffee shop is 120,000 with 25,000 city population. The second coffee shop has a
monthly sale of 145,000 with 38,000 populations. The third coffee shop earned 160,000 monthly
with 45,000 populations. ABC Corporation is planning to have a 4th coffee shop in another city
with a population of 50,000. What is the forecasted monthly sale of the 4th coffee shop?
a. 168,530
b. 169,530
c. 170,530
d. 171,530
e. 172,530

3. Using the linear regression formula of item #2 with the same values of a and b, what will be the
forecasted monthly sales of a 5th coffee shop with 90,000 city population?
a. 248,130
b. 249,130
c. 250,130
d. 251,130
e. 252,130

4. Linear Regression Analysis is widely used in the following disciplines. Which field uses Linear regression
in observational studies employing regression analysis?
a. Finance
b. Economics
c. Epidemiology
d. Environmental Science
e. Machine Learning

5. Which of the following is true about Dependent Variables?

a. They are called the predictors or the risk factors and confounders.
b. This variable is the variable being tested.
c. This variable changes or controls the independent variable.
 d. It is assumed to have a direct effect on the independent variable.
e. It is denoted by X.

6. BCD Corporation is currently using a linear regression formula where Total Cost is equal to 26 pesos
Variable Cost and 510 pesos Fixed Cost to determine the cost of producing umbrellas. What is the total
cost of producing 30 umbrellas?
a. 1,290
b. 15,326
c. 16,080
d. 4,500
e. 7,580

7. Which of the following is incorrect?

a. Lease is a contract granting someone the use of an asset for specified period of time.
b. Rent involves a tenant periodically paying a property owner money to use an office or a house.
c. Utilities Expense are cost incurred by using utilities such as electricity, and water.
d. Fixed Expenses in salaries include employees who are not involved in production
e. Interest Expense is the amount that a company pays for premium payments.

8. Linear regression attempts to model the relationship between two variables by fitting a linear equation
to observe data. A linear regression line has an equation of the form Y = a + bx. What is the
denotation/meaning of x in the formula?
a. intercept
b. total cost
c. explanatory variable
d. slope of the line
e. variable cost

9. Which of the following is incorrect?

a. When production decreases, raw materials expenses also decrease.
b. When production decreases, variable expenses also decrease.
c. When production decreases, fixed cost also decrease.
d. When production increases, mixed cost also increases.
e. When production increases, variable cost also increases.

10. In Least squares regression method, this one remains the same no matter how much output a
company produces. What is this?
a. y
b. a
c. +
d. b
e. x

11. CDE Corporation has numerous burger chains all over Zambales. One in Sta. Cruz with 80,000 monthly
sales, 70,000 monthly sales in Candelaria, 60,000 monthly sales in Palauig, 50,000 monthly sales in
Botolan, 40,000 in San Marcelino, and 2 burger chains in Olongapo city with both 30,000 monthly sales.
Using a linear regression table, what is the value of our n?
a. 330,000
 b. 360,000
c. 6
d. 7
e. None of the preceding answers

12. DEF Chemicals produces bottles of a cleaning lubricant. The attached costs and activity levels are
66,000 pesos in Batch 1 with 4,000 bottles; 53,000 pesos in Batch 2 with 3,000 bottles, and 48,000 pesos
in Batch 3 with 2,000 bottles. DEF Chemicals wants to know the total cost of producing 10,000 bottles. On
the basis of the above data, determine the value of the summation of x square.
a. 167,000
b. 9,000
c. 519,000,000
d. 29,000,000
e. 9,469,000,000

13. EFG Supplies produces pad papers. Producing 20 Pad Papers has a total cost of 600 pesos, 30 Pad
Papers has a total cost of 840 pesos, and producing 40 pad papers has a total cost of 1040 pesos. EFG
wants to know the total variable cost that they incur to produce pad papers because the company plans
to produce 100 pad papers per batch. Given the information above, what is the variable cost of EFG
Supplies in producing pad papers?
a. 20
b. 21
c. 22
d. 23
e. 24

14. FGH Production Company supplies bags to 5 stores located in Iba. and they incurred a total of 320,000
pesos in October 2021. In the same month, Store 1 ordered 200 bags; Store 2 ordered 150 bags; Store 3
ordered 1,600 bags; Store 4 ordered 650 bags; and Store 5 ordered half of what Store 3 ordered. What is
the fixed cost of FGH Production Company if the variable cost per unit is 90 pesos?
a. 14,000
b. 15,000
c. 16,000
d. 17,000
e. 18,000

15. In November, GHI Factory listed the following expenses: the Total Expenses amounted to 867,000
pesos; Rent for the month is 30,000; Utilities Expense is 6,000 for electricity, and another 3,000 for water.
STU also paid 10,000 for total payment of Insurance and Loan Interest, and 50,000 for salaries paid to
employees not involved in the production. With all these big expenses, unfortunately, GHI only
manufactured 1,200 pieces of tables. How much is the variable cost per unit?
a. 620
b. 640
c. 660
d. 680
e. 700