When evaluating and choosing cost drivers all of the following are true EXCEPT:
A)the cost driver is economically plausible.
B)there is a significance of effect of the independent variable
C)there is an independent verification of the relationship by a committee of cost accountants
D)there is a goodness of fit between the various data points and the regression line

Question

Quizplus · Accepted Answer

While it is important to ensure that the cost driver is economically plausible, has a significant effect, and shows a strong fit between the data points and regression line, there is no requirement for independent verification by a committee of cost accountants. This step may be helpful in some situations, but it is not always necessary or practical.

When Evaluating and Choosing Cost Drivers All of the Following