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Good day sir
How is linear regression linked to cost behavior. For instance l had thought that one of regression analysis advantage over the high low method is that it assumes linear cost behavior but the answer is saying it does not
kindly assist
If the costs behave exactly linearly, then both high low and regression would give the same results.
Because in real life costs are not exactly linear, then regression gives a better estimate of the underlying linearity than does the high low method.
I do suggest that you watch my free lectures on this.
The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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