Which of the following is an advantage of using the scatterplot method over the high-low method to estimate costs?
A)It is a statistical method to determine the "best fit."
B)A cost analyst can review the data visually and eliminate outliers.
C)The quality of the cost formula relies on the objective judgment of the analyst.
D)The cost formula can be determined simply by looking at two points of data.

Question

Quizplus · Accepted Answer

The scatterplot method allows for visual analysis of data, which can help identify outliers and patterns that may not be evident with the high-low method. The high-low method relies on only two data points, which may not accurately represent the overall trend of the data. The scatterplot method is also a statistical method that uses objective analysis to determine the best fit, rather than relying on subjective judgment.

Which of the Following Is an Advantage of Using the Scatterplot