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Choose the relationship which best predicts the dependent variable
After exploring a diversity of relationships, you should select the one that can best be employed in predicting the dependent variable. Generally, this will be the relationship which best predicts the values of the dependent variable. The high correlation (relationship) among a potential independent variable and the dependent variable frequently indicates that the independent variable will be a good predictive tool. Though, you should reassure that the value of the independent variable is accessible in order for you to make timely estimates. When it is not, you might require considering other alternatives.
There are different techniques which can be used to estimate the cost function. Examples comprise: • Engineering technique• Account analysis• Regression analysis• High low technique• Time series analysis• Simulation analysis
Outline Five characteristics of relevant cost
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How costs behave as the level of activity/volume changes. Why an understanding of cost behaviour is important ? Types Variable e.g. petrol, direct materials Fixed e.g.
John Doe, MD A Business Simulation This simulation covers the transactions completed by John Doe, MD, a medical service business, which began on July 1 of the current year. Dr. D
how much is this service?
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calculate formula
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