The worse fit between estimated cost and actual observations is shown on regression line with ___________?
Correct answer: A. larger residual terms
- A. larger residual terms
- B. zero residual terms
- C. variable residual terms
- D. smaller residual terms
Explanation
A regression line fits poorly when actual observations lie far from it, producing larger residual terms. Zero or smaller residuals represent a closer fit.
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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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