Managerial judgment
A) is the most accurate way to determine cost behavior.
B) is the least used method in practice.
C) is critically important in determining cost behavior.
D) none of these are correct

Question

Quizplus · Accepted Answer

Managerial judgment is critical in determining cost behavior because cost behavior is affected by a wide range of factors, such as production processes, supplier prices, technological changes, and market demand. Managers must use their knowledge and experience to identify these factors and accurately estimate how they will impact costs. While other methods, such as statistical analysis, can also be used to determine cost behavior, they are often limited by the availability and accuracy of data. Therefore, managerial judgment is an essential tool for making sound cost management decisions.

Managerial Judgment