If a Scatterplot Reveals a Fairly Weak Relationship Between Cost

question 141

True/False

If a scatterplot reveals a fairly weak relationship between cost and volume, the manager should select a different activity for modeling cost behavior.

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Definitions:

Effective Interest Method

An accounting technique for amortizing bond premium or discount over the life of the bond in a way that reflects a constant interest rate.

Amortization Table

A schedule that details each payment on an amortizing loan (such as a mortgage), including how much of each payment is interest vs. principal and the remaining balance.

Semiannual Interest

Semiannual interest is interest that is calculated and paid twice a year on investments or loans.

Straight-Line Method

A depreciation technique that allocates an equal amount of depreciation expense over the useful life of an asset.