Which of the Following Best Describes the Least Squares Criterion

question 106

Multiple Choice

Which of the following best describes the least squares criterion?

• A)it identifies the best fitting line as the line that minimizes the sum of the squared vertical distances of points from the line
• B)the best fitting line minimizes the sum of the horizontal distances from the line
• C)it minimizes the sum of the absolute distances from the line
• D)it is a measure of the goodness of fit of the estimated regression equation
• E)none of the above

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Definitions:

Average Price

The mean price of a good or service calculated by dividing the sum of the prices of all the items by the number of items.

Overhead Volume Variance

Overhead volume variance is the difference between the budgeted overhead at standard production volumes and the actual overhead incurred due to variance in production volume.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels.

Direct Materials Quantity Variance

The difference between the actual quantity of direct materials used in production and the standard quantity expected to be used, multiplied by the standard cost per unit.