Asked by
Meike Lageveen
on Oct 11, 2024
Verified
Your boss would like you to estimate the fixed and variable components of a particular cost.Actual data for this cost over four recent periods appear below. 
Using the least-squares regression method, what is the cost formula for this cost?
A) Y = $75.89 + $1.02X
B) Y = $72.64 + $2.13X
C) Y = $ 0.00 + $5.04X
D) Y = $75.50 + $2.02X
Least-squares Regression
A statistical method used to determine the line of best fit by minimizing the square of the differences between observed values and values predicted by a linear function.
Cost Formula
An equation used to calculate the total cost, combining both fixed and variable costs, often used in cost accounting.
- Employ the method of least squares regression for the accurate determination of cost formulas using provided data collections.
- Understand the principles and use of least-squares regression for error reduction and cost behavior estimation.
Verified Answer
HW
Learning Objectives
- Employ the method of least squares regression for the accurate determination of cost formulas using provided data collections.
- Understand the principles and use of least-squares regression for error reduction and cost behavior estimation.