A Disadvantage of Engineering Analysis Which Is Used to Estimate

question 54

Multiple Choice

A disadvantage of engineering analysis which is used to estimate cost functions is ________.

• A) it fails to produce a cost function
• B) it is a costly process
• C) it is not acceptable under Generally Accepted Accounting Principles
• D) it cannot be used with mixed costs

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Definitions:

Variable Costing

An accounting method that only includes variable costs (costs that change with production levels) in the cost of goods sold and calculates fixed costs as period costs.

Net Operating Income

The total revenue from a business's operations minus its operating expenses, excluding taxes and interest.

Operating Loss

A situation where a company's operating expenses exceed its gross profits, indicating a negative profitability from business operations.

Year 2

Refers to the second year of a specific period, often used in the context of financial and performance analysis over time.