The vertical difference, which measures distance between estimated and actual cost for every single observation is classified as __________?
Correct answer: B. residual term
- A. positive term
- B. residual term
- C. negative term
- D. squared term
Explanation
The vertical difference between an actual cost and its estimated cost is called the residual term. Its sign may be positive or negative, while squaring it is a later step in regression analysis.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
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.
Practise Cost Accounting
941 free Cost Accounting MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Cost Accounting questions
The strength of relationship between cost driver and cost is considered as __________?
In linear cost function, the fixed cost is considered as _________?
In step cost functions, the cost is increased by ____________?
An error term, disturbance term or residual term is calculated as ___________?
The lower level of production leads to ____________?
In the specification analysis, the assumptions related to variance state that: ________________?