Accountants Sometimes Use a Linear Cost Model for Nonlinear Costs

question 83

Multiple Choice

Accountants sometimes use a linear cost model for nonlinear costs because:

• A) the cost of using more accurate models may exceed the benefit of greater accuracy
• B) a nonlinear model is too difficult to develop
• C) a nonlinear model is too difficult for managers to interpret
• D) All of these answers are correct.

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Definitions:

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