Which of the Following Statements Related to Assumptions About Estimating

question 83

Multiple Choice

Which of the following statements related to assumptions about estimating linear cost functions is true?

• A) Variations in a single cost driver explain variations in total costs.
• B) A cost object is anything for which a separate measurement of costs is desired.
• C) A linear function approximates cost behaviour at all ranges of production.
• D) Correlation refers to the relationship between fixed and variable costs.
• E) The graph of total costs does not form a straight line within the relevant range because of variable costs.

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