Regression analysis, Managerial Accounting


A regression equation identifies an estimated relationship between a dependent variable (the cost) and one or more independent variables (the cost driver). When the equation includes only one independent variable then it is referred to as simple regression and its form is:



Y is the predicted value of Y
a and b are Constant
x is the cost driver

When the equation includes 2 or more independent variables, it is referred to as multiple regression and is of the form:

Y = a + b 1 x1 + b2 x2 + …….bn xn for n independent variables.


Posted Date: 12/4/2012 7:41:30 AM | Location : United States

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