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Unformatted text preview: formula you developed) Regression Analysis Statistically fit line based on all data points Use a spreadsheet package to o Develop a cost o Determine if the variability in the dependant variable is explained by the variability in the independent variable Example R squared = co-efficient of determination = goodness of fit Intercept = b = fixed cost X Variable 1 = slope Managerial Judgment To calculate the independent variable, managers make an educated guess High Low Method Advantage o Objective o Quick Disadvantages o Possible that high and low points are outliers Regression Analysis Advantages o Accurate Disadvantages o Interpretation of output requires a greater amount of knowledge Managerial Judgment Advantages o People bring knowledge that spreadsheets cant supply Disadvantage o Need experience, knowledgeable people making the judgment calls...
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This note was uploaded on 05/26/2011 for the course ACCT 2102 taught by Professor Farmer during the Spring '08 term at University of Georgia Athens.
- Spring '08