In regression analysis, if the observed cost value is 62 and predicted cost value is 29, then the disturbance term would be ____________?
Correct answer: A. 33
- A. 33
- B. 91
- C. 81
- D. 43
Explanation
The disturbance term is the difference between observed and predicted cost: 62 − 29 = 33. It represents the unexplained portion of the observed cost.
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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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