Final answer:
The hypothesis test of cost parameters indicates whether the parameters are different from zero, helping to determine if there is a significant relationship between cost parameters and activity output in statistical analysis.
Step-by-step explanation:
The hypothesis test in this context is used to determine if there is a statistically significant relationship between cost parameters, such as fixed cost, marginal cost, average total cost, and average variable cost, and the activity output.
It does this by using the population correlation coefficient (p) and the sample correlation coefficient (r), along with the sample size (n), to decide if the relationship is different from zero, which would imply no relationship, or significantly different from zero, indicating a potential relationship.
Using a hypothesis test such as this helps to answer questions like whether a cost parameter like fixed cost or marginal cost is significantly associated with the level of production or sales (activity output). It does not provide a range of values or measure the degree of association directly; that would be the role of other statistical measures like the correlation coefficient or confidence intervals.
The correct statement about the hypothesis test of cost parameters is b. it indicates whether the parameters are different from zero.