Which of the following statements is true regarding regression analysis?
A) It is often less accurate than the high/low method.
B) It is a better predictor of fixed costs than variable costs.
C) It can not be used to predict the effect that a change in volume of production has on net income.
D) It uses statistical methods to fit a cost line through a number of data points.

Question

Quizplus · Accepted Answer

Regression analysis uses statistical methods to create a cost line that can be used to predict future costs based on changes in volume. It is generally more accurate than the high/low method and can also predict both fixed and variable costs.

Which of the Following Statements Is True Regarding Regression Analysis