A line on a scatter diagram that is intended to reflect the past relation between cost and unit volume is the:
A)Margin of safety line.
B)Break-even line.
C)Contribution margin line.
D)Estimated line of cost behavior.
E)Standard cost line.

Question

Quizplus · Accepted Answer

The estimated line of cost behavior is a line on a scatter diagram that reflects the past relation between cost and unit volume. It is useful for predicting future costs based on expected changes in volume. The other options (A, B, C, and E) either do not relate specifically to past cost-volume relationships or are not commonly used in conjunction with scatter diagrams.

A Line on a Scatter Diagram That Is Intended to Reflect