Using the least-squares regression method, the estimate of the variable component of inspection cost per unit produced is closest to:

A) $22.80
B) $8.82
C) $8.27
D) $8.78

Least-squares Regression

Least squares regression is a statistical technique that identifies the optimal fit line by minimizing the sum of the squared differences between the actual and forecasted values.

Variable Component

The portion of costs or expenses that varies directly with changes in business activity level.

Inspection Cost

Expenses associated with the activities undertaken to ensure that products or services meet the required standards and specifications.