When estimating future costs, information quality is higher when:
A) Costs must be allocated
B) The regression Adjusted R-square is near zero
C) The accounting system can trace relevant costs to a cost object
D) Most costs are fixed, rather than variable

Question

Quizplus · Accepted Answer

The quality of information for estimating future costs is higher when the accounting system can directly trace relevant costs to a cost object, as this allows for more accurate and specific allocation of costs, improving the reliability of cost estimates.

When Estimating Future Costs, Information Quality Is Higher When