An error term, disturbance term or residual term is calculated as ___________?
Correct answer: C. u=Y-y
- A. U=A-b
- B. u=A-a
- C. u=Y-y
- D. u=X-x
Explanation
The residual is the difference between the actual dependent-variable value, Y, and its estimated value, y. Thus, the error term is written as u = Y − y.
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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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