If There Is Little or No Relationship Between the Cost

question 301

True/False

If there is little or no relationship between the cost and the volume, the data points on a scatterplot will appear almost as a straight line.

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Definitions:

Administrative Expenses

Administrative Expenses are costs related to the general operations and administration of a business that are not linked directly to the manufacturing or selling of products or services.

Fixed Inspection Cost

A cost that remains constant for a specific period regardless of the level of goods produced or inspected.

Machine-Hours

Machine-hours are a measure of the amount of time a machine is operated, used in manufacturing to allocate costs to products.

Relevant Range

It refers to the span of activity within which the assumptions about fixed and variable cost behaviors hold true.