Advantages of the Method of Least Squares Over the High-Low

question 54

Multiple Choice

Advantages of the method of least squares over the high-low method include all of the following except

• A) a statistical method is used to mathematically derive the cost function.
• B) only two points are used to develop the cost function.
• C) the squared differences between actual observations and the line (cost function) are minimized.
• D) All the observations have an effect on the cost function.

Utilize synthetic division for dividing polynomials.

Determine the solution to algebraic equations.

Simplify expressions involving exponents and variables.

Factor polynomials given one or more factors.

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Definitions:

Fiscal Period

A specific time frame used for accounting purposes, typically a year, over which a company reports its financial performance.

Freight

The charge paid for the transport of goods, usually based on the distance and weight of the merchandise being shipped.

Inventory Cost Flow

The process by which costs associated with inventory are accounted for, impacting how cost of goods sold and ending inventory are calculated.

Gross Profit

The difference between total revenue and the cost of goods sold, indicating the fundamental profitability of a company's core activities.