The Account Analysis Method Estimates Cost Functions ________

question 113

Multiple Choice

The account analysis method estimates cost functions ________.

• A) by classifying cost accounts as variable, fixed, or mixed based on qualitative analysis
• B) using time-and-motion studies
• C) at a high cost, which renders it seldom used
• D) in a manner that cannot be usefully combined with any other cost estimation methods

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Definitions:

Variable Costing

An accounting method that includes only variable manufacturing costs - direct materials, direct labor, and variable manufacturing overheads - in product costs.

Variable Costs

Costs that change in proportion to the level of production or business activity.

Full Costs

This refers to the comprehensive total amount that includes all relevant costs of production, including direct, indirect, fixed, and variable costs.