The small residual terms and positive slope of line indicate ______________?
Correct answer: D. directly proportion
- A. badness proportions
- B. goodness proportion
- C. inversely proportion
- D. directly proportion
Explanation
A positive slope shows that the dependent cost rises as the independent activity measure rises, indicating a direct relationship. Small residuals further suggest that the line fits the observations reasonably well.
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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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