When evaluating a cost function estimated by least squares regression,it is important to see if the estimated cost function makes economic sense.This is assessed by ________.
A) examining the sign of the coefficient of determination
B) examining the sign of the fixed cost estimate
C) examining the sign of the variable cost estimate
D) examining the standard deviation of the cost driver

Question

Quizplus · Accepted Answer

The sign of the variable cost estimate should make economic sense, as it indicates whether costs increase or decrease with the cost driver.

When Evaluating a Cost Function Estimated by Least Squares Regression,it