Which of the following is a problem related to cost analysis?
A) fixed costs are allocated as if they are variable costs
B) extreme observations are adjusted or removed
C) a company keeps accounting records on the accrual basis
D) inflationary effects are removed

Question

Quizplus · Accepted Answer

Allocating fixed costs as if they are variable costs can result in inaccuracies and distortions in cost analysis. This is because fixed costs do not change with changes in production levels or sales volume and should not be treated as if they do.

Which of the Following Is a Problem Related to Cost