Which of the following statements best describes the account analysis approach to cost estimation?
A) Cost estimates are based on optimal or ideal operating conditions
B) Discernible patterns of the past are used to predict future behavior
C) Historical operating costs are plotted against some past operating activity
D) Accounting personnel must have adequate experience and good judgment

Question

Quizplus · Accepted Answer

The account analysis approach to cost estimation involves reviewing historical cost data and using judgment to classify costs as variable, fixed, or mixed. This method relies heavily on the experience and judgment of accounting personnel to analyze and estimate costs accurately.

Which of the Following Statements Best Describes the Account Analysis