Past Cost Information Might Be Too Unreliable for Future Cost

question 48

Multiple Choice

Past cost information might be too unreliable for future cost estimation because:

• A) An organization has been operating too long in a stable environment
• B) The costs are primarily mixed
• C) A company has added a new product line
• D) Managers expect no changes in the cost function

---

Definitions:

Financial Expert

A professional with extensive knowledge and skills in financial markets, investment strategies, and financial planning.

Organization's Investments

Relates to the allocation of resources by an organization into projects, assets, or initiatives with the expectation of achieving future benefits or returns.

Board Responsibility

The obligation of a board of directors to oversee the strategic direction and governance of an organization, ensuring it fulfills its mission while being accountable to its stakeholders.

Obedience

The act of following the commands or guidance of an authority figure or institution.