There is a better fit between actual cost observations and estimated costs when the ________ is small.
A)residual term
B)fixed costs
C)machine hours
D)regression analysis
E)activity-based costing

Question

Quizplus · Accepted Answer

The residual term refers to the difference between the actual cost observations and estimated costs in a regression analysis. When the residual term is small, it indicates that the estimated costs are closer to the actual costs. Therefore, the better fit between actual cost observations and estimated costs occurs when the residual term is small.

There Is a Better Fit Between Actual Cost Observations and Estimated