Using Simulation to Perform Risk Analysis Is Like Playing Out

question 15

True/False

Using simulation to perform risk analysis is like playing out many what-if scenarios by randomly generating values for the probabilistic inputs.

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Definitions:

Cost Driver

A factor that causes the costs of an activity to increase or decrease.

Sequential Method

A cost allocation technique that processes cost pools in a pre-determined order, allocating costs to one cost object before moving on to the next.

Support Department Allocations

The process of attributing a portion of support (or indirect) department costs to the producing departments within an organization, based on agreed-upon criteria.

Cost Driver

A factor that causes a change in the cost of an activity; it directly impacts the cost of manufacturing goods or delivering services.