A statistical method for identifying cost behavior is the:Multiple ChoiceHigh-low method.Least-squares regression method.CVP charting method.Composite method.Scatter diagram method.
Question
A statistical method for identifying cost behavior is the:Multiple ChoiceHigh-low method.Least-squares regression method.CVP charting method.Composite method.Scatter diagram method.
Solution
The question is asking for a statistical method used to identify cost behavior. Here are the options:
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High-low method: This method involves taking the highest and lowest activity levels and comparing the total costs at each level to determine the variable and fixed costs.
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Least-squares regression method: This is a statistical technique that uses historical data to predict future outcomes. It's used to estimate the relationship between two or more variables.
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CVP charting method: CVP stands for Cost-Volume-Profit. This method is used to understand the relationship between cost, volume, and profit in decision making.
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Composite method: This method involves combining several different methods to analyze cost behavior.
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Scatter diagram method: This method involves plotting data points on a graph to identify trends and patterns, which can help in predicting cost behavior.
Each of these methods can be used to identify cost behavior, depending on the specific circumstances and data available.
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