The least-squares regression method is:
A) A graphical method to identify cost behavior.
B) A statistical method to identify cost behavior.
C) An algebraic method to identify cost behavior.
D) The only identify cost estimation method allowed by GAAP.
E) A cost estimation method that only uses the two extreme values.

Question

Quizplus · Accepted Answer

The least-squares regression method is a statistical method to identify cost behavior. It involves analyzing the relationship between the dependent variable (costs) and one or more independent variables (such as activity levels) to estimate the cost equation. It is a commonly used and accepted method for cost estimation.

The Least-Squares Regression Method Is