Managerial judgment is a factor in determining cost behaviour.

Question

Quizplus · Accepted Answer

Managerial judgment plays a significant role in determining cost behaviour, as it involves subjective estimations about how costs will change with fluctuations in activity levels. These judgments can be based on various factors, such as prior experience, industry knowledge, and economic conditions. Therefore, cost behaviour analysis often requires the input of managers and accountants to make informed decisions about how costs will behave under different scenarios.

Managerial Judgment Is a Factor in Determining Cost Behaviour