Question

Obtaining regression estimates for cost estimation requires establishing the existence of a logical relation between activities...

Obtaining regression estimates for cost estimation requires establishing the existence of a logical relation between activities and the cost to be estimated. Which of the following is not used to refer to these activities?

  • X terms.

  • dependent variables.

  • predictors.

  • independent variables.

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Answer #1

Answer: Dependent variables

The most significant step in obtaining regression estimates for the purpose of cost estimation is to demonstrate that a logical relationship exists between the cost to be estimated(dependent variables) and the activities(independent variables).These activities are called predictors, independent variables, x terms or the RHS of a given regression equation.The costs that are to be estimated are referred as the Y term, the dependent variable or the LHS of a given regression equation.It is the responsibility of the cost analyst to provide that the activities are logically associated with the costs.Thus, dependent variables are not used to refer to activities rather it is used to refer to the cost that is to be estimated.

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