(Appendix 2A)_________________ is a method of separating a mixed cost into its fixed and variable elements by fitting a line to the data that minimizes the sum of the squared errors.
A)Account analysis
B)Scattergraph
C)High-low
D)Least-square regression

Question

Quizplus · Accepted Answer

The method described in the question is known as least-square regression. Choice A (account analysis) involves using a manager's knowledge of cost behavior to separate mixed costs into their fixed and variable elements. Choice B (scattergraph) involves plotting the data points on a graph and estimating the fixed and variable elements based on the pattern of the points. Choice C (high-low) involves using the highest and lowest data points to estimate the variable cost per unit and the total fixed cost.

(Appendix 2A)_________________ Is a Method of Separating a Mixed Cost