The least-squares regression method is:
A) A graphical method to identify cost behavior.
B) An algebraic method to identify cost behavior.
C) A statistical method to identify cost behavior.
D) The only identify cost estimation method allowed by GAAP.
E) A cost estimation method that only uses the two extreme values.

Question

Quizplus · Accepted Answer

The least-squares regression method is a statistical method to identify cost behavior. It uses statistical techniques to find the line of best fit that minimizes the sum of the squared errors between the actual values and the predicted values. It is a commonly used method in cost estimation and forecasting.

The Least-Squares Regression Method Is