In Determining Cost Behavior in Business, the Cost Function Is

question 89

Multiple Choice

In determining cost behavior in business, the cost function is often expressed as Y = a + bX. Which one of the following cost estimation methods should not be used in estimating fixed and variable costs for the equation? (CMA adapted)

• A) Scattergraph method.
• B) Simple regression.
• C) High and low point method.
• D) Management analysis of data.

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Definitions:

Prolactin

A hormone produced by the anterior pituitary gland that stimulates milk production after childbirth.

Milk Production

The biological process by which mammals produce milk to feed their young, involving various hormonal controls.

Hormone

Chemical messenger, produced in one part of the organism, that controls the activity of other tissues or organs in that organism.

Hypothalamus

A region of the brain that controls many bodily functions, including hunger, thirst, temperature regulation, and the release of many hormones.