Accountants sometimes use a linear cost model for nonlinear costs because_____.
A)a nonlinear model is too difficult for managers to interpret
B)a nonlinear model is too difficult to develop
C)the cost of using models that are more accurate may exceed the benefit of greater accuracy
D)all of these answers are correct

Question

Quizplus · Accepted Answer

Accountants may opt for a linear cost model over a nonlinear one for several reasons: nonlinear models can be complex to interpret and develop, and sometimes the additional accuracy they provide may not justify their higher cost and complexity. This makes a simpler linear model more appealing in certain contexts despite its limitations in accurately capturing nonlinear cost behaviors.

Accountants Sometimes Use a Linear Cost Model for Nonlinear Costs