Which of the Following Is an Advantage of Using the Scatterplot

question 95

Multiple Choice

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

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

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Definitions:

Direct Write-off Method

A method of accounting for bad debts that charges the amount directly to expense when it is determined to be uncollectible.

Allowance Account

An accounting reserve set up to account for future adjustments such as bad debts or product returns.

Direct Write-off Method

An accounting method where uncollectible accounts receivable are directly written off against income at the time they are deemed non-collectable.

Allowance for Doubtful Accounts

An accounting provision representing the estimated portion of receivables that may not be collected.