A limitation of using the scattergraph method to estimate the cost components of total cost is the
A)scattergraph method is complex and costly to use.
B)scattergraph method requires the use of statistical software.
C)scattergraph method is not an accepted method for many companies.
D)choice of the line used to estimate the cost components is subjective.

Question

Quizplus · Accepted Answer

When using the scattergraph method, the choice of the line used to estimate the cost components is subjective, which can lead to inaccuracies in the estimates. Therefore, D is the only correct choice. A, B, and C are incorrect because the scattergraph method is not necessarily complex or costly, does not always require statistical software, and is an accepted method in many companies.

A Limitation of Using the Scattergraph Method to Estimate the Cost