Regression analysis works best when the relationship between costs and cost drivers is:
A) Positive and linear
B) Negative and linear
C) Positive and indirect
D) Positive, linear, and indirect

Question

Quizplus · Accepted Answer

Regression analysis is most effective when the relationship between the dependent variable (costs) and independent variable (cost drivers) is positive and linear, meaning as one increases, the other also increases in a straight-line manner.

Regression Analysis Works Best When the Relationship Between Costs and Cost