The first step in estimation of cost function by using quantitative analysis is to _________?
Correct answer: D. choose dependent variable
- A. choose price estimation method
- B. choose revenue estimation method
- C. choose independent variable
- D. choose dependent variable
Explanation
Quantitative cost estimation begins by selecting the dependent variable, usually the cost to be estimated. The cost driver is then selected as the independent variable that explains changes in that cost.
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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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