Which of the Following Statements Related to Assumptions About Estimating

question 13

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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Definitions:

Commission

A fee paid for services, usually a percentage of the amount involved in a transaction or sale.

Normal Sales

Sales transactions that occur under regular business conditions, without special circumstances or discounts.

Percents

A mathematical term representing a fraction of 100, used to denote a portion or share of a total.

Decimals

Numerical values expressed using a decimal system, involving a point to separate the whole number from the fractional part.