A range around the regression line within which the management accountant can rely that the actual value of the predicted cost will fall is referred to as:
A) A relevant range.
B) A goodness of fit.
C) A confidence interval.
D) A t-value.
E) A p-value.

Question

Quizplus · Accepted Answer

A confidence interval is a range of values around the regression line within which the actual value of the predicted cost is expected to fall with a certain level of confidence (usually 95% or 99%). This means that, for example, if the management accountant predicts a cost of $100,000 with a 95% confidence interval of +/- $10,000, they can be 95% confident that the actual cost will be between $90,000 and $110,000. This gives the management accountant a range to work with and helps them make better decisions based on expected costs.

A Range Around the Regression Line Within Which the Management