What Is a Disadvantage of Estimating a Trend Line Equation

question 116

Multiple Choice

What is a disadvantage of estimating a trend line equation by "eye-balling" the best fitting line to a
Scatter diagram?

• A) Provides quick approximations
• B) Is subject to human error
• C) Provides accurate forecasts
• D) Is too difficult to calculate
• E) Requires graph paper

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Definitions:

Materials and Labor

Materials and labor represent the primary costs involved in the production of goods, including raw materials used and wages paid to workers.

Period Costs

Expenses directly tied to non-manufacturing activities such as selling, administration, and general business operations, recognized in the income statement when incurred.

General Costs

General costs are indirect expenses related to the overall operations of a company that cannot be directly tied to a specific product or service, such as rent, utilities, and administrative salaries.

Indirect Materials

Materials used in the production process that do not directly become part of the finished product.