A measure of how much of the fluctuation of a cost is explained by changes in the cost driver is ________.
A) least squares regression analysis
B) standard error of coefficient
C) standard error of constant
D) coefficient of determination

Question

Quizplus · Accepted Answer

The coefficient of determination measures how much of the variability or fluctuations in a cost can be attributed to changes in the cost driver. It is also known as R-squared and ranges from 0 to 1, with higher values indicating a stronger relationship between the cost and the cost driver. Choices A, B, and C are all related to regression analysis but do not specifically measure how much of the fluctuation of a cost is explained by changes in the cost driver.

A Measure of How Much of the Fluctuation of a Cost