The Least-Squares Regression Method Is

question 137

Multiple Choice

The least-squares regression method is:

• A) A graphical method to identify cost behavior.
• B) An algebraic method to identify cost behavior.
• C) A statistical method to identify cost behavior.
• D) The only identify cost estimation method allowed by GAAP.
• E) A cost estimation method that only uses the two extreme values.

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Definitions:

Direct Labour-Hours

The total hours worked directly on the production of goods or services.

External Reports

Financial documents that are prepared for parties outside the organization, such as shareholders and creditors.

Overhead Cost

Refers to ongoing expenses that are not directly tied to production but are necessary for running the business, such as rent, utilities, and insurance.

Direct Labour-Hours

A measure of the total time individuals spend working directly on manufacturing a product.