An inaccurate cost function with a slope coefficient that is estimated too low may MOST likely result in:
A)predicting total costs that are too high.
B)promoting a product that is actually more profitable than budgeted.
C)initiating cost cutting measures when they are unnecessary.
D)evaluating a weak manager as having strong performance.

Question

Quizplus · Accepted Answer

An inaccurate cost function with a slope coefficient that is estimated too low may lead to underestimating the variable costs associated with production. This could result in the appearance of lower total costs than actually incurred, potentially leading to the initiation of cost-cutting measures when they might not be necessary, as the perceived cost efficiency is based on inaccurate data.

An Inaccurate Cost Function with a Slope Coefficient That Is