An accountant uses linear regression analysis on overhead cost data and calculates a correlation coefficient (r) of 0.95. What is the correct value and interpretation of the coefficient of determination (r2)?

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Mathematics · Regression Analysis

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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90.25% of the variation in variable overheads is explained by the variation in sales volume.

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Answer 1

90.25% of the variation in sales volume is explained by the variation in variable overheads.

Answer 2

95% of the variation in sales volume is explained by the variation in variable overheads.

Answer 3

90.25% of the variation in variable overheads is explained by the variation in sales volume.

Answer 4

95% of the variation in variable overheads is explained by the variation in sales volume.

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