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aksik [14]
3 years ago
10

The three methods used to classify costs into their fixed and variable components includes:_____.

Mathematics
2 answers:
Artyom0805 [142]3 years ago
5 0

Answer:

a. high-low method.

b. scatter diagrams.

d. least-squares regression.

Step-by-step explanation:

The three methods used to classify costs into their fixed and variable components includes:

  • high-low method.

  • scatter diagrams.

  • least-squares regression.
Allushta [10]3 years ago
4 0

Answer:

a. high-low method.

b. scatter diagrams.

d. least-squares regression.

Step-by-step explanation:

Costing is a measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.

Fixed cost can be defined as predetermined expenses in a business that remain constant for a specific period of time regardless of the quantity of production or level of outputs. Some examples of fixed costs in business are loan payments, employee salary, depreciation, rent, insurance, lease, utilities etc.

On the other hand, variable costs can be defined as expenses that are not constant and as such usually change directly and are proportional to various changes in business activities. Some examples of variable costs are taxes, direct labor, sales commissions, raw materials, operational expenses etc.

In Financial accounting, the three methods used to classify costs into their fixed and variable components includes high-low method, scatter diagrams and least-squares regression.

The high-low method is a quick and easy way to estimate costs by using historical accounting information from a range of reporting periods.

A scatter diagram (scattergraph) estimate costs by considering all the data points and not just the lowest or highest point.

A least squares regression line is a standard technique in regression analysis used to make the vertical distance obtained from the data points running to the regression line to become very minimal or as small as possible.

Generally, the sum of the residuals of a least squares regression line is always equal to zero.

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