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LO 2 643 LeastSquares 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 2 644 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.
 Winter '07
 ManagerialAccounting

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