The independent variable:
A)is also referred to as the cost driver
B)may also be called the cost-allocation base if referring to an indirect cost
C)should have an economically plausible relationship with the dependent variable
D)All of these answers are correct.

Question

Quizplus · Accepted Answer

All of the given choices are correct statements about the independent variable. It is referred to as the cost driver because it is the variable that influences the cost of the dependent variable. It can also be called the cost-allocation base if it is an indirect cost. Moreover, for the independent variable to be meaningful, it should have an economically plausible relationship with the dependent variable.

The Independent Variable