If an automobile manufacturer changes from skilled labor to computer-controlled assembly procedures, the past data
A) are useful in predicting future costs.
B) are of little or no value in predicting future costs.
C) are representative of future costs.
D) should be used without adjustments to predict future costs.

Question

Quizplus · Accepted Answer

Past data of skilled labor would not be relevant for predicting future costs when the manufacturer has shifted to computer-controlled assembly procedures. The new process would have different cost factors and efficiencies, and therefore, past data would be of little or no value in predicting future costs.

If an Automobile Manufacturer Changes from Skilled Labor to Computer-Controlled