Which of the Following Is an Advantage of Using the Scatter-Graph

question 68

Multiple Choice

Which of the following is an advantage of using the scatter-graph method over the high-low method to estimate costs?

• A) It is a statistical method to determine "best fit".
• B) A cost analyst can review the data visually and eliminate outliers.
• C) The quality of the cost formula relies on the objective judgment of the analysts.
• D) The cost formula can be determined simply by looking at two points of data.

---

Definitions:

Cash Sales

Transactions where payment for goods or services is made at the time of sale in cash or equivalent forms.

Credit Sales

Sales made by a business where payment is delayed, allowing the customer to purchase goods or services on account.

Accrual Basis

The Accrual Basis of accounting records revenues and expenses when they are earned or incurred, regardless of when cash is exchanged.

Rent Expense

The cost incurred from leasing a space, property, or equipment for business operations or personal use over a specified time period.