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Commerce · Q376

Costing

Graduate and Post Graduate · Commerce · question 376

Q376

In regression analysis, if observed cost value is 50 and predicted cost value is 7, then disturbance term will be

A.
57
B.
43
Answer
C.
67
D.
47

Answer: Option B

Solution

Answer: Option B
Solution:
In regression analysis, if observed cost value is 50 and predicted cost value is 7, then disturbance term will be 43.
Disturbance term = Observed cost value - Predicted cost value
= 50 - 7 = 43.