Individual cost items included in the dependent variable should have the same cost driver or more than one cost function should be estimated.

Question

Quizplus · Accepted Answer

This statement is true. If individual cost items included in the dependent variable have different cost drivers, the resulting cost function will not accurately represent the underlying cost structure. Each cost item should be associated with the same cost driver or a separate cost function should be estimated for each item with a different cost driver.

Individual Cost Items Included in the Dependent Variable Should Have