A steeply sloped regression line indicates:
A)a strong relationship between the cost driver and costs.
B)an economically plausible relationship exists.
C)a greater proportion of fixed costs than variable costs.
D)management should cut costs.

Question

Quizplus · Accepted Answer

A steeply sloped regression line indicates a strong relationship between the cost driver and costs. This suggests that changes in the cost driver value have a significant impact on the cost of producing a product or offering a service. As such, it is important for management to pay close attention to this relationship in order to make informed decisions about pricing, production levels, and cost control measures.

A Steeply Sloped Regression Line Indicates