# Linear Regression "Least Squares Method"

sammyd22
Well-KnownRegistered Posts:

**207**
Anyone studying Cima with any knowledge they can share on the above.

Im competent with costing but this is a bit tricky.

Any tips?

Im competent with costing but this is a bit tricky.

Any tips?

0

## Comments

460207Under the new syllabus they have dropped it from P2 to P1. Any help is appreciated.

They are also assessing investment appraisal in detail on P1 and the lecturer has said that this is also new to P1.

460yeah NPV and IRR are in P1 now

207Thanks!

456P1 - Linear Regression (Forecasting ?)

P2 - Linear Programming (Limiting Factors)

When I did P2 there was a longer question asking to use Graphical Linear Programming with a limiting factor style scenario (so maybe uselful to get to grips with this), but I never came across any question on P1 using Linear regression, only in college.

Good luck, I don't think it is as bad as it looks - the text books just look awful from first glance.

2,034Linear Regression "Least Squares Method"

This is an AAT topic in PEV and MAC and builds on the Reports and Returns unit

The formula y = a + bx represents a straight line. a is the fixed part, b is the variable part per unit and x is the number of units.

So the same method that applies to semi-variable costs also applies to forecasting sales

[email protected]

www.sandyhood.com

2,034Each exam has a set of formulae to help

Would you like to work through an example to try to help?

email me if you think I can help (my PM is virtually always full!!)

[email protected]

www.sandyhood.com

207Im familiar with the linear regression formula of Y= a + bx, where Y = total costs, A = Fixed Costs & b = Variable element per unit and X = Qty. This is not a problem for me as i covered this in AAT.

The problem is with the Least Square method. Ill get a practice question from home and post it on.

Thanks

981http://www.itl.nist.gov/div898/handbook/pmd/section1/pmd141.htm

http://www.itl.nist.gov/div898/handbook/pmd/section4/pmd431.htm

207thanks.

I doesnt seem to be as bad as first thought. I missed the lecture last week and had to look it up myself. The scientific formula had me confused but i should be ok.

Thanks All

697Regression is a topic covered in a lot of detail in any A level Statistics or Maths textbook discussing statistics. Work through a few examples and it should be easy. From memory, you would need to draw the graph Y=A + bx and I think there is another formula to follow to work out the regression.

207Thanks Jayne

460"Regression Analysis (also know as "method of least squares" ) find the Straight line which minimises the squares of the vertical distances from the original data to the regression line, i.e the line of best fit"

used with the formula (given in exam) you should be able to work out a and b for the straight line expression.

207Thanks for looking Slackda!