Which of the following should be the first step in the analysis of cost behaviour?
A) Estimating the slope coefficient.
B) Estimating the intercept term.
C) Estimating the R-squared in the case of least-squares regression.
D) Scattergram plot.

Question

Quizplus · Accepted Answer

The first step in the analysis of cost behaviour should be to create a scattergram plot to visually observe the relationship between cost and activity levels. This provides a good starting point for further analysis and helps determine the type of cost behaviour present. Estimating the slope coefficient, intercept term, or R-squared comes later in the process of regression analysis.

Which of the Following Should Be the First Step in the Analysis