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(Appendix 2A)One of the Questions That Needs to Be Asked

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(Appendix 2A)One of the questions that needs to be asked before data from regression analysis is used to develop a cost function is whether the relationship between the cost and the cost driver is economically plausible. Explain what this means. In addition, give an example of a cost with one cost driver that would be economically plausible and an example of one cost driver that would not be economically plausible.

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Economic plausibility means that there i...

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