Estimating the Appropriate Cost Driver as Part of Activity-Based Costing

question 1

Multiple Choice

Estimating the appropriate cost driver as part of activity-based costing is an example of which type of predictive analytics?

• A) classification
• B) regression
• C) time series
• D) variance analysis

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Definitions:

Work in Process

Goods that are in various stages of the production process but are not yet complete.

Expected Cost

The predicted expense associated with producing a good or executing a plan.

Units Sold

The quantity of product sold in a specific period, often used as a measure of business performance.

Units of Production Depreciation

A method of depreciation where the useful life of an asset is based on the number of units it produces.