When evaluating and choosing cost drivers all of the following are true EXCEPT:
A)there is a significance of effect of the independent variable.
B)there is an independent verification of the relationship by a committee of cost accountants.
C)the cost driver is economically plausible.
D)there is a goodness of fit between the various data points and the regression line.

Question

Quizplus · Accepted Answer

While it is important to verify the relationship between the cost driver and the cost, there is no requirement for a committee of cost accountants to do so. Therefore, this statement is not always true.

When Evaluating and Choosing Cost Drivers All of the Following