The major purpose of cost estimation is to break down total cost into which of the following components?
A)short-run and long-run components.
B)fixed and variable components.
C)controllable and noncontrollable components.
D)direct and indirect components.

Question

Quizplus · Accepted Answer

The major purpose of cost estimation is to break down total cost into fixed and variable components. Fixed costs remain constant regardless of the level of production or sales, while variable costs change based on the level of production or sales. Breaking down total cost into fixed and variable components helps in determining the breakeven point and making informed decisions about pricing and production levels.

The Major Purpose of Cost Estimation Is to Break Down