A technique for estimating regression line, which minimizes the sum of vertical deviations squares is classified as __________?
Correct answer: B. least square technique
- A. variable technique
- B. least square technique
- C. indexed technique
- D. fixed technique
Explanation
The least-squares technique estimates the line by minimizing the sum of squared vertical differences between observed and predicted cost values. Squaring prevents positive and negative deviations from cancelling each other.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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