Asked by Sally Suzie on May 09, 2024
Verified
What is a scatter diagram? How is a scatter diagram used to estimate cost behavior?
Scatter Diagram
A graphical representation that displays the relationship between two variables, typically to identify correlation patterns.
Cost Behavior
The way different types of production costs change when there is a change in level of production activity.
- Apply the high-low method to estimate costs.
Verified Answer
AL
Amanda LarsonMay 15, 2024
Final Answer :
A scatter diagram displays past cost data in a graphical form,with the volume on the horizontal axis and the cost on the vertical axis.Using one's best judgment,the estimated line of cost behavior is drawn on the scatter diagram to estimate the relation between costs and volume.
Learning Objectives
- Apply the high-low method to estimate costs.