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To Determine the Slope of the Variable Cost from a Scatter

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To determine the slope of the variable cost from a scatter diagram, divide the change in cost by the change in units.


Definitions:

Endowment Effect

The cognitive bias causing individuals to ascribe higher value to things merely because they own them.

Loss Aversion

A psychological principle suggesting people tend to prefer avoiding losses to acquiring equivalent gains.

Military Time

A timekeeping system that runs from midnight to midnight, displayed in a 24-hour format, to avoid ambiguity.

Documenting

The process of recording information systematically and accurately for the purpose of communication, compliance, and record-keeping.

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