In regression analysis, if an observed cost value is 65 and the disturbance error is 32 then predicted cost value will be __________?
Correct answer: C. 33
- A. 97
- B. 57
- C. 33
- D. 53
Explanation
The observed cost equals predicted cost plus disturbance error, so predicted cost = 65 − 32 = 33. This assumes the stated error is a positive residual.
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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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