The large residual term and negative slope of line indicate?
Correct answer: A. inverse proportion
- A. inverse proportion
- B. direct proportion
- C. badness proportions
- D. goodness proportion
Explanation
A negative slope means cost moves in the opposite direction to the cost driver, indicating an inverse relationship. A large residual, however, signals a poor fit and does not change the direction shown by the slope.
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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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