Which of the Following Assumptions Are Typically Made When Estimating

question 41

Multiple Choice

Which of the following assumptions are typically made when estimating costs?

• A)Costs are nonlinear and costs estimated for a specific level of activity are within the relevant range.
• B)Costs are linear and costs estimated for a specific level of activity are within the relevant range.
• C)Costs are nonlinear and total costs never exceed fixed costs.
• D)Costs are linear and total costs never exceed variable costs.
• E)None of the answer choices is correct.

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Definitions:

Conformance

Adherence to a set of standards, specifications, or regulations designed to ensure quality and compliance in products or services.

Capital Equipment

Long-term assets, such as machinery or buildings, used in the production of goods or services.

Final Cost

The total amount of expenses incurred at the completion of a project or the production of a good, inclusive of all charges and adjustments.

Capital Items

Long-term assets acquired for the purpose of generating income, not intended for resale in the normal course of business.