If the residual error is 25 and the predicted cost value is 50, then the observed cost value would be ______________?
Correct answer: D. 75
- A. 100
- B. 25
- C. 50
- D. 75
Explanation
The residual equals observed cost minus predicted cost, so observed cost equals predicted cost plus residual: 50 + 25 = 75.
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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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