Goodness of fit has meaning only if the relationship between the cost drivers and costs is economically plausible.

Question

Quizplus · Accepted Answer

Goodness of fit measures the degree to which a regression model fits the observed data. However, it is important to ensure that the relationship between the cost drivers and costs is economically sensible before interpreting the goodness of fit results. Otherwise, the results may not be meaningful or relevant to decision-making.

Goodness of Fit Has Meaning Only If the Relationship Between