Which of the Following Statements About the Cost Estimation Methods

question 182

Multiple Choice

Which of the following statements about the cost estimation methods is FALSE?

• A)With the conference method, the accuracy of the cost estimates largely depends on the accuracy and details of the inputs.
• B)The methods require more historical data than most quantitative analysis.
• C)The methods are not mutually exclusive.
• D)There are four methods generally used for cost estimation.
• E)Many organizations use a combination of the approaches.

---

Definitions:

Markup

A term used in accounting and finance to describe the difference between the cost of a good or service and its selling price.

Activity At Capacity

The level of operations where a company or a production process is utilizing all available resources without any waste.

Fixed Manufacturing Overhead

Indirect manufacturing costs that do not change with the level of production, such as salaries of managers and depreciation of factory equipment.

Estimated Labor-Hours

A projection of the total hours of work required to complete a task or project.