ADM2341 Chapter 6 Cost Behaviour

Using the high low 120000 units are sold using the

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Unformatted text preview: and commissions? a. $ 2,000 a. $ 2,000 b. $ 4,000 b. $ 4,000 c.. $10,000 c $10,000 d. $12,000 d. $12,000 LO 2 6-43 Least-Squares Regression Method A method used to analyze mixed costs if a scattergraph plot reveals an approximately linear relationship between the X and Y variables. This method uses all of the This all data points to estimate the fixed and variable cost components of a mixed cost. The goal of this method is to fit a straight line to the data that minimizes the data minimizes sum of the squared errors. LO 2 6-44 Comparing Results From the Three Methods The three methods just discussed provide The three methods just discussed provide The The slightly different estimates of the fixed and slightly different estimates of the fixed and variable cost components of the mixed cost. variable cost components of the mixed cost. variable variable This is to be expected because each method This is to be expected because each method This This uses differing amounts of the data points to uses differing amounts of th...
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This note was uploaded on 01/27/2014 for the course ADM 2341 taught by Professor Managerialaccounting during the Winter '07 term at University of Ottawa.

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