Why Do Accountants Normally Calculate Cost Per Unit as an Average

question 45

Multiple Choice

Why do accountants normally calculate cost per unit as an average?

• A) Determining the exact cost of a product is virtually impossible.
• B) Minute details such as a second of labor time cannot be effectively measured.
• C) Even when producing multiple units of the same product, normal variations occur in the amount of materials and labor used.
• D) All of these are justifications for computing average unit costs.

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Definitions:

Independent Variables

Variables in an experiment or observational study that are manipulated or categorized to observe their effect on dependent variables.

Dependent Variable

The variable in a study or experiment that is expected to change in response to changes in the independent variable.

Multiple Regression Equation

An equation that models the linear relationship between a dependent variable and multiple independent variables.

Expected Value

A measure of the central location of a random variable.