A statistical method for deriving an estimated line of cost behavior is the:
A) Scatter diagram method.
B) High-low method.
C) Composite method.
D) CVP charting method.
E) Least-squares regression method.

Question

Quizplus · Accepted Answer

The least-squares regression method is a statistical method that examines the relationship between two variables and estimates the line of best fit. In this case, the method is used to estimate the line of cost behavior based on a set of data points. This is the most accurate and reliable method for cost behavior estimation, which is why it is commonly used in accounting and finance.

A Statistical Method for Deriving an Estimated Line of Cost