Selecting a volume?related cost driver and classifying each account as a variable cost or a fixed cost is called_____.
A)engineering analysis
B)high?low analysis
C)visual?fit analysis
D)account analysis

Question

Quizplus · Accepted Answer

The process described in the question is known as account analysis, which involves selecting a cost driver related to the volume of activity and classifying each cost account as either fixed or variable. Option A is incorrect as engineering analysis refers to the analysis of the physical attributes of a product to determine the cost. Option B is incorrect as high-low analysis is a method used to determine the variable and fixed cost components of a mixed cost through comparing the highest and lowest levels of activity. Option C is incorrect as visual-fit analysis is a graphical representation used to visually estimate the cost equation of a mixed cost.

Selecting a Volume?related Cost Driver and Classifying Each Account as a Variable