The ideal data base for estimating cost functions quantitatively has the following characteristic:
A)The data base should consider many values spanning a wide range for the cost driver.
B)There is no homogeneous relationship between the cost driver and the individual cost items.
C)The gaps in the data can be reliably estimated.
D)The data base should contain a few reliably measured observations.
E)The data based should be based on audited accounts.

Question

Quizplus · Accepted Answer

A wide range of values for the cost driver would allow for a more accurate estimation of the cost function. The other choices are not ideal for estimating cost functions quantitatively. B suggests a lack of consistency in how the cost driver relates to individual cost items, C implies unreliable data, D suggests a small sample size, and E implies potential bias in the data.

The Ideal Data Base for Estimating Cost Functions Quantitatively Has