Why should an analyst always plot cost data in addition to applying least-squares regression analysis? A. An analyst should plot cost data on a least-squares regression analysis because it is the most accurate method of reviewing historical data for the cost drivers for each product produced. This analysis allows the analyst to accurately measure cost functions and how they affect the costs of making a product
B. Plotting data helps to identify outliers that are unusual and may indicate a situation that is not representative of the environment for which cost predictions are being made. It can also show nonlinear cost behavior that can lead to transformations of the data before applying linear regression methods
C. Analysts should plot data since it includes a good portion of fixed and variable costs of the cost drivers that go into making a decision Using the least-squares regression analysis in conjunction with plotting cost data allows the analyst to be more flexible in determining if amounts should be considered fixed or variable in the making of a product
D. None of the above.