Costing - Study Mode
[#751] A technique for estimating regression line, which minimizes sum of vertical deviations squares is classified as
Correct Answer
(B) least square technique
Explanation
Solution: A technique for estimating regression line, which minimizes sum of vertical deviations squares is classified as least square technique.
[#752] Type of relationship stating "how changes in cost driver drives cause changes in cost" will be termed as
Correct Answer
(B) economic plausibility
Explanation
Solution: Type of relationship stating "how changes in cost driver drives cause changes in cost" will be termed as economic plausibility. There is a positive relationship between the number of service reports (a cost driver) and the customer- service department costs.
[#753] Slope coefficient of cost function is zero because it intersects the
Correct Answer
(B) y-axis at constant
Explanation
Solution: Slope coefficient of cost function is zero because it intersects the y-axis at constant.
[#754] An assumption of specification analysis, which states all values of residuals which are uniformly scattered around regression line is classified as
Correct Answer
(C) normality of residuals
Explanation
Solution: An assumption of specification analysis, which states all values of residuals which are uniformly scattered around regression line is classified as normality of residuals. Residuals are the differences between the observed and predicted.
[#755] Goodness of fit is used to measure wellness of
Correct Answer
(B) predicted values
Explanation
Solution: Goodness of fit is used to measure wellness of predicted values. The goodness-of-fit is a measure of how well the fitted PF accounts for the data.