Past cost information might be too unreliable for future cost estimation because:
A) An organization has been operating too long in a stable environment
B) The costs are primarily mixed
C) A company has added a new product line
D) Managers expect no changes in the cost function

Question

Quizplus · Accepted Answer

Past cost information may be unreliable if the organization has undergone significant changes, such as adding a new product line. The costs associated with the new product line may be different than any costs incurred in the past, making past data unreliable for future cost estimation.

Past Cost Information Might Be Too Unreliable for Future Cost