Anumber of terms are provided CITO 1) A management team can use several methods of quantitative analysis to predict the value of a single overhead cost pool in a traditional costing system Thema account analysis method economic plausibility, high-low method, simple linear regression method and time series 2) There are different criteria to consider when choosing a method of analysis: affordability, understandability, data availability and quality. comolation, and account analysis 3) The relationship between cost of unequally shared resources used in production and their benefit to distinct types of cost objects must be economically plausible. The change in quantity of resources used must be a good measure of change in benefit. The relationship must be a 4) Ideally the OLS will be based on at least 25 data points observed and reported in the past as a team predict the value of the indirect cost pool OLS simple linear regression analysis is to be used insufficient data are available then the other methods of analysis will help the management A high explanatory po indicates a high 5) When true, the orderly change in the quantity of resource used will explain a large proportion of the change in the indirect cost pool. This is called between the change in the sure of benefit or the X, and the change in the predicted indirect cost pool or between the predicted (x, y) line and the actual data points (X, Y) from which the prediction was made 6) You can obve this in the goodness of t 7) The measure of goodness of it is called 2 Other important statistics that assess the reliability of the predicted regression line are the P-value and Stat Text