Which of the Following Is an Advantage of Using the Method

question 1

Multiple Choice

Which of the following is an advantage of using the method of least squares rather than the high-low method?

• A)It can be calculated without a calculator.
• B)Two points are used to develop the cost function.
• C)For a given set of data, it will always produce the same cost formulae.
• D)The outlying observations have no effect on the cost function when the calculations are complete.

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Definitions:

Responsibility Centers

Organizational units within a company that are managed and evaluated separately, focusing on achieving specific financial and operational goals.

Transfer Prices

Prices assigned to transactions between related entities within a multinational corporation, often for accounting and tax purposes.

Decentralized Units

Separate divisions or departments within an organization that operate semi-autonomously, with their management responsible for certain decisions and operations.

Investment Centers

Segments or units within an organization for which the manager is responsible for generating revenue and controlling costs, often evaluated based on their return on investment.