What is residual analysis, and what information can it provide?
Residual analysis refers to a broad class of tests which can be performed using the error terms from a regression line to test the assumptions of regression analysis. Residual analysis can test the assumption of normal distribution of the error terms, the assumption of equal standard deviations of the error terms, and the assumption that the error terms are independent from one another. In residual analysis, we may also "flag" error values that are especially large.
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The fixed factory overhead production-volume variance represents:
a. Information that management can use for cost-control purposes. b. Important information for companies pursuing a JIT production philosophy. c. Money lost or gained because of achieved production levels. d. A result of unitizing fixed overhead costs for product-costing purposes. e. Information regarding the effectiveness of the organization in meeting sales targets.
Information needed for preparing a budgeted income statement is primarily taken from __________________ budgets.
Fill in the blank(s) with the appropriate word(s).