The second step for estimation of cost function by using quantitative analysis is to ___________?
Correct answer: A. choose independent variable
- A. choose independent variable
- B. choose cost estimation method
- C. choose price estimation method
- D. choose dependent variable
Explanation
After identifying the dependent cost variable, the next step is to select the independent variable or cost driver that explains changes in that cost. A price estimation method is unrelated to this process.
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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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