Costing - Study Mode
[#966] In specification analysis, assumptions related to residuals states must be
Correct Answer
(B) independent
Explanation
Solution: In specification analysis, assumptions related to residuals states must be independent. The goal of the Requirements Analysis and Specification is to clearly understand customer requirements and to systematically organize these requirements in a specification document.
[#967] Deviations between estimated regression line and vertical deviations are classified as
Correct Answer
(D) residual terms
Explanation
Solution: Deviations between estimated regression line and vertical deviations are classified as residual terms.
[#968] In regression analysis, if observed cost value is 50 and predicted cost value is 7, then disturbance term will be
Correct Answer
(B) 43
Explanation
Solution: In regression analysis, if observed cost value is 50 and predicted cost value is 7, then disturbance term will be 43. Disturbance term = Observed cost value - Predicted cost value = 50 - 7 = 43.
[#969] Number of observations in regression analysis is considered as
Correct Answer
(D) degree of freedom
Explanation
Solution: Number of observations in regression analysis is considered as degree of freedom. In a regression model, each term is an estimated parameter that uses one degree of freedom. In the regression output below, you can see how each term requires a DF.
[#970] Estimation of cost functions, an ignoring information from all points but considering two observation points can be classified as
Correct Answer
(B) disadvantage of high low method
Explanation
Solution: Estimation of cost functions, an ignoring information from all points but considering two observation points can be classified as disadvantage of high low method.