The scatter diagram method of cost estimation:
A) Is influenced by extreme observations
B) Is superior to other methods in its ability to distinguish between discretionary and committed fixed costs
C) Requires the use of judgment
D) Provides a measure of the goodness of fit

Question

Quizplus · Accepted Answer

The scatter diagram method depends of visual observation of the data points on a graph to fit the cost curve to the data. The position of the curve on the graph depends on the judgment of the person observing the data points.

The Scatter Diagram Method of Cost Estimation