Which of the following should be checked before conducting regression analysis:
I. The relationship between the cost and cost driver is economically plausible.
II. Data from unusual periods has been eliminated.
III. The number of observations is sufficient.
A) I only
B) I and II only
C) II and III only
D) I, II, and III

Question

Which of the following should be checked before conducting regression analysis: 
I. The relationship between the cost and cost driver is economically plausible.
II. Data from unusual periods has been eliminated.
III. The number of observations is sufficient.
A) I only
B) I and II only
C) II and III only
D) I, II, and III

Quizplus · Accepted Answer

Before conducting regression analysis, it's important to ensure that the relationship between the cost and cost driver is economically plausible (I), data from unusual periods has been eliminated to avoid skewing the results (II), and that there is a sufficient number of observations to make the analysis statistically significant (III).

Which of the Following Should Be Checked Before Conducting Regression