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Which quantitative cost estimation technique uses all historical data points to estimate fixed and variable cost components via mathematical regression?

ALeast-Squares Regression Method
BScattergraph Method
CHigh-Low Method
DAccount Analysis Method

Explanation

* Least-Squares Regression mathematically minimizes the sum of squared vertical deviations to fit a cost estimation line (Y = a + bX).
* Superior accuracy compared to the High-Low method which relies on only two extreme data points.
* Provides statistical evaluation metrics like R-squared.

Exam Relevance
  • Topic: Cost Accounting
  • Subtopic: Cost Estimation
Submitted by: mcqstutor Team More Finance & Accounting MCQs →

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