A plot of data that results in one extreme observation most likely indicates that ________.
A) more than one cost pool should be used
B) an unusual event such as a plant shutdown occurred during that month
C) the cost-allocation base has been incorrectly identified
D) individual cost items do not have the same cost driver

Question

Quizplus · Accepted Answer

One extreme observation in a plot of data could indicate an unusual event, such as a plant shutdown, that affected the cost for that period. This is unlikely to be caused by the other options presented.

A Plot of Data That Results in One Extreme Observation