An Advantage of Using Regression Analysis Over the High-Low and Scattergraph

question 44

Multiple Choice

An advantage of using regression analysis over the high-low and scattergraph methods is that regression analysis

• A)is less costly to implement than high-low or scattergraph methods.
• B)is a more precise approach than the high-low or scattergraph methods.
• C)uses fewer data points.
• D)determines the breakeven point.

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Definitions:

Matching Principle

The Matching Principle is an accounting concept that necessitates the recording of expenses in the same period as the revenues they helped to generate, ensuring accurate financial reporting.

Production Costs

The total expenses incurred in the manufacturing of a product or delivering a service, including raw materials, labor, and overhead costs.

Inventory

The total amount of goods and materials held by a company for the purpose of sale, use in production, or other operational purposes.

Financial Leverage

The use of borrowed funds with the intent to increase the potential return on investment.