When more than one factor causes variations in the variable element of a mixed cost, multiple regression analysis should be used.

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The least-squares regression method is a type of multiple regression analysis that can be used to analyze a mixed cost when more than one factor causes variations in the variable element of the cost. This method involves using statistical techniques to identify and measure the relationship between the cost and the factors that affect it, and to estimate the fixed and variable components of the cost equation. The least-squares method involves minimizing the sum of the squared errors between the observed and predicted values of the cost, and determining the line of best fit that describes the relationship between the cost and the factors that influence it.

When More Than One Factor Causes Variations in the Variable