A scatter plot is especially useful when managers wish to
A) Compute a cost function
B) Update a past cost function for future changes
C) Study the relationship between a cost and a potential cost driver
D) Analyse cost behavior when only one period of data is available

Question

Quizplus · Accepted Answer

A scatter plot is a useful tool to study the relationship between a cost and a potential cost driver. It helps managers to identify any patterns or trends in the data and to determine whether there is a cause-and-effect relationship between the cost and the cost driver. This information can be used to make better decisions regarding cost management and control. A scatter plot is not used for computing or updating cost functions, nor is it a preferred tool for analyzing cost behavior with only one period of data available.

A Scatter Plot Is Especially Useful When Managers Wish to