A concern with using historical data to measure cost behavior is the possibility that historical data may hide past inefficiencies that the company could reduce if it could identify them.

Question

Quizplus · Accepted Answer

Historical data may not accurately reflect current or future cost behavior, and it may not account for changes in processes or technology that could impact costs. Additionally, past inefficiencies may have been corrected, and using historical data could mask opportunities for further improvement.

A Concern with Using Historical Data to Measure Cost Behavior