The formula of 1 - unexplained variation ⁄ total variation is used to calculate _____________?
Correct answer: A. coefficient of determination
- A. coefficient of determination
- B. coefficient of index
- C. coefficient of residual
- D. coefficient of prediction
Explanation
The coefficient of determination is calculated as 1 minus unexplained variation divided by total variation. It indicates how much of the change in cost is explained by the cost driver.
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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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