A major disadvantage of the observation method of analyzing cost behavior is:
A)It bases its solution on only two observations.
B)It results in its analyzed cost being treated as either fixed or variable,based on which type of behavior it more closely resembles.
C)Two persons could draw different lines through the data points.
D)It enables non-representative points,called outliers,to be identified.

Question

Quizplus · Accepted Answer

It results in its analyzed cost being treated as either fixed or variable,based on which type of behavior it more closely resembles.

A Major Disadvantage of the Observation Method of Analyzing Cost