Which one of the following statements about difficulties of cost estimation is true?
A) Data may not be based on normal operating conditions
B) Linear relationships between total costs and activity levels may exist
C) Both A and B
D) None of the above

Question

Quizplus · Accepted Answer

When collecting data for cost estimation, it is important that activity and cost data are representative of typical operations. If data are collected for an operating period when conditions were not similar to expected future conditions, estimates of future costs will not be reliable.

Which One of the Following Statements About Difficulties of Cost