A strength of the high low method of cost estimation is that the high point and

# A strength of the high low method of cost estimation

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27.A strength of the high-low method of cost estimation is that the high point and the low point are representative of all data points. 28.In regression analysis, the term “goodness of fit” indicates the strength of the relationship between the cost driver and the costs. Difficulty : 2 Objective : 4 29.Accurate cost estimation is useful both in understanding past cost relationships and as a means of predicting costs. Difficulty : 2 Objective : 4 30.Machine-hours is a more economically plausible cost driver of machine maintenance than number of direct manufacturing labor-hours. Difficulty : 2 Objective : 5 31.The smaller the vertical difference between actual costs and predicted costs the better the goodness of fit. Difficulty : 2 Objective : 5 32.Choosing an economically plausible cost driver for indirect costs is fairly simple and knowledge of operations is unnecessary. Difficulty : 2 Objective : 5 Finding an economically plausible cost driver is not always simple and many times knowledge of operations is necessary. Mr . Kareem Abozeed
41 33.A flat or slightly sloped regression line indicates a strong relationship. 35.Economic plausibility is an important criterion for choosing a cost driver. Difficulty : 1 Objective : 5 36.A step cost function is an example of a nonlinear cost function. Difficulty : 1 Objective : 6 37.Step fixed-cost functions are variable over the long run. Difficulty : 2 Objective : 6 39.A learning curve measures the effect of learning on efficiency. Difficulty : 1 Objective : 6 40.Plotting learning curve observations is helpful in selecting the appropriate learning curve model. Difficulty : 1 Objective : 41.When new products are introduced, learning-curve effects can have a major influence on production scheduling. Difficulty : 2 Objective : 7 42.It is appropriate to incorporate expected learning-curve efficiencies when evaluatingperformance. Difficulty : 1 Objective : 7

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• Fall '16
• taher refaat
• Accounting, Difficulty, Kareem Abozeed