If an automobile manufacturer changes from skilled labour to computer-controlled assembly procedures,of what use is the past data?
A)They are useful in predicting future costs.
B)They are of little or no value in predicting future costs.
C)They are representative of future costs.
D)They should be used without adjustments to predict future costs.

Question

Quizplus · Accepted Answer

Since the switch from skilled labour to computer-controlled assembly procedures represents a significant change in the manufacturing process, past data may not be applicable in predicting future costs. The new process may have different cost drivers and efficiencies, making past data unreliable for predicting future costs. Therefore, the past data is of little or no value in predicting future costs.

If an Automobile Manufacturer Changes from Skilled Labour to Computer-Controlled