The weak relationship between cost and cost driver is indicated on a regression line, which is ___________?
Correct answer: B. slightly sloped
- A. curved
- B. slightly sloped
- C. completely sloped
- D. dotted
Explanation
A weak relationship produces a regression line with a small slope, showing that changes in the cost driver cause relatively little change in cost. A steep slope would suggest a stronger rate of change, not necessarily stronger correlation.
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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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