The 'account analysis method' estimates cost functions:
A)at a high cost,which renders it seldom used.
B)in a manner that cannot be usefully combined with any other cost estimation methods.
C)by classifying cost accounts as variable,fixed,or mixed based on qualitative analysis.
D)using time-and-motion studies.

Question

Quizplus · Accepted Answer

The account analysis method is based on classifying cost accounts as variable, fixed, or mixed based on qualitative analysis. This allows for the estimation of cost functions, and is a common and widely used method of cost estimation. Options A and B are incorrect, as the account analysis method is not considered prohibitively expensive and can be combined with other methods. Option D refers to time-and-motion studies which are an entirely different method of cost estimation.

The 'Account Analysis Method' Estimates Cost Functions