When Companies Develop Cost Management Systems,which of the Following Purposes

question 131

Multiple Choice

When companies develop cost management systems,which of the following purposes of cost allocation usually dominates?

• A) to predict the economic effects of strategic and operational control decisions
• B) to provide the desired motivation and to give feedback for performance evaluation
• C) to compute income and asset valuations for financial reporting
• D) to justify costs or obtain reimbursement

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Definitions:

Indicator Variables

Binary variables used in regression analysis, taking the value of either 0 or 1 to denote the absence or presence of a categorical effect.

Analysis of Variance

A statistical method used to compare the means of three or more samples to determine if at least one of them is significantly different from the others.

Dummy Variable

A binary variable used in regression analyses to represent categories of a nominal variable.

Slope Coefficient

In linear regression, it represents the expected change in the dependent variable for a one-unit change in the independent variable.