When Analyzing a Mixed Cost, You Should Always Plot the Data

question 11

True/False

When analyzing a mixed cost, you should always plot the data in a scattergraph, but it is particularly important to check the data visually on a scattergraph when the R² from a least squares regression is low. A quick look at the scattergraph can reveal that there is little relation between the cost and the activity or that the relation is something other than a simple straight line.

---

Definitions:

Exclusive Control

The authority of a party to exclusively manage, direct, or govern property, an organization, or a situation, without interference from others.

Wooden Dock

A structure built on or over water out of wood, used by boats and ships for loading, unloading, and mooring.

Negligence Per Se

A legal principle whereby an action is classified as negligent if it contravenes a specific statute or regulation.

Personal Property

Assets that include tangible objects such as furniture and vehicles, and intangible rights, excluding real estate.