An analysis and estimation method of cost, by classifying cost accounts as fixed or variable with respect for specific output level is considered as _____________?
Correct answer: D. account analysis method
- A. manufacturing analysis method
- B. price analysis method
- C. unit analysis method
- D. account analysis method
Explanation
The account analysis method estimates cost behavior by reviewing individual accounts and classifying their costs as fixed or variable for a relevant activity level. The other methods are not standard cost-estimation classifications.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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