32808165
Description
Flashcards by Jamie Plym, updated more than 1 year ago
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Created by Jamie Plym
about 3 years ago
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| Question | Answer |
| Account analysis | A method for analyzing cost behavior in which an account is classified as either variable or fixed based on the analyst’s prior knowledge of how the cost in the account behaves. |
| Dependent variable | A variable that responds to some causal factor; total cost is the dependent variable, as represented by the letter Y, in the equation Y = a + bX. |
| Engineering approach | A detailed analysis of cost behavior based on an industrial engineer’s evaluation of the inputs that are required to carry out a particular activity and of the prices of those inputs. |
| High-low method | A method of separating a mixed cost into its fixed and variable elements by analyzing the change in cost between the high and low activity levels. |
| Independent variable | A variable that acts as a causal factor; activity is the independent variable, as represented by the letter X, in the equation Y = a + bX. |
| Least-squares regression method | A method of separating a mixed cost into its fixed and variable elements by fitting a regression line that minimizes the sum of the squared errors. |
| Linear cost behavior | Cost behavior is said to be linear whenever a straight line is a reasonable approximation for the relation between cost and activity. |
| R2 | A measure of goodness of fit in least-squares regression analysis. It is the percentage of the variation in the dependent variable that is explained by variation in the independent variable. |
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