In which step of estimating a cost function using quantitative analysis do managers realize the relationship between the driver and costs is approximately linear,or there was an error in recording the data?
A)Step 1: Choose the Dependent Variable.
B)Step 2: Identify the Independent Variable,or Cost Driver.
C)Step 3: Collect Data of the Dependent Variable and the Cost Driver.
D)Step 4: Plot the Data.
E)Step 5: Estimate the Cost Driver of the Estimated Cost Function.

Question

Quizplus · Accepted Answer

In step 4, managers plot the data to visually examine the relationship between the dependent variable and the cost driver. If the relationship appears to be approximately linear, then linear regression can be used to estimate the cost function. If the relationship does not appear to be linear, or if there are outliers or errors in the data, managers may need to revisit the previous steps and collect more accurate data or identify a different cost driver.

In Which Step of Estimating a Cost Function Using Quantitative