An assumption of specification analysis states: any observation does not belong to any other observation's residual value, is classified as ___________?
Correct answer: C. independence of residuals
- A. independence of correlation
- B. dependence of residuals
- C. independence of residuals
- D. none of the above
Explanation
Independence of residuals means that one observation's error or residual is not related to another observation's residual. Dependence would violate this regression assumption.
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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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