An assumption of specification analysis, which states all the values of residuals which are uniformly scattered around regression line is classified as __________?
Correct answer: C. normality of residuals
- A. abnormality of residuals
- B. normality of regression
- C. normality of residuals
- D. abnormality of regression
Explanation
Normality of residuals means the errors are distributed around the regression line in a regular pattern, usually centered around zero. The other choices incorrectly describe abnormal residuals or the regression line itself.
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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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