Regression analysis can be used in ABC implementations to help managers select the primary cost driver for an activity cost pool.

Question

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Regression analysis can be used in Activity-Based Costing (ABC) to determine the correlation between the primary cost driver and the activity cost pool. This helps managers identify and select the key cost driver for each activity, which can lead to more accurate cost allocations and better decision-making. Therefore, regression analysis is a useful tool in ABC implementations.

Regression Analysis Can Be Used in ABC Implementations to Help