M M24.6 Advanced: Calculation of coefficient of determination. A management accountant is analysing data relating to retail sales on behalf of marketing colleagues. The marketing staff believes that the most important influence on sales is local advertising undertaken by the retail store. The company also advertises by using regional television areas. The company owns more than 100 retail outlets, and the data below relate to a sample of ten representative outlets: The data have been partly analysed and the intermediate results are available below: y=4,550y2=2,451,300x1y=58,040x1=113x12=1,533x2y=121,100x2=212x22=6,120x1x2=2,780 You are required to examine closely, using coefficients of determination, the assertion that the level of sales varies more with movements in the level of local advertising than with changes in the level of regional company advertising. ( 8 marks) Note that the coefficient of determination for y and x1 may be calculated from r2=(nx12(x1)2)(ny2(y)2)nx1yx1y CIMA Stage 3 Management Accounting Techniques M M24.6 Advanced: Calculation of coefficient of determination. A management accountant is analysing data relating to retail sales on behalf of marketing colleagues. The marketing staff believes that the most important influence on sales is local advertising undertaken by the retail store. The company also advertises by using regional television areas. The company owns more than 100 retail outlets, and the data below relate to a sample of ten representative outlets: The data have been partly analysed and the intermediate results are available below: y=4,550y2=2,451,300x1y=58,040x1=113x12=1,533x2y=121,100x2=212x22=6,120x1x2=2,780 You are required to examine closely, using coefficients of determination, the assertion that the level of sales varies more with movements in the level of local advertising than with changes in the level of regional company advertising. ( 8 marks) Note that the coefficient of determination for y and x1 may be calculated from r2=(nx12(x1)2)(ny2(y)2)nx1yx1y CIMA Stage 3 Management Accounting Techniques