Question

True/False:

1) The integration of cost information provides the basis for robust decision analysis.
2) A Cost Time Investment graph presents the information that follows the use of resources through time, from the moment the production process begins until the company recovers those invested resources through the sale of the product.
3) The high-low cost estimation method does not provide an accurate and reliable estimate of fixed costs, especially if the relevant range is too far from zero.
4) A dummy variable is used in regression analysis to represents the presence or absence of a condition (e.g., seasonality).
5) In the context of cost estimation, a linear regression output produced by Microsoft Excel will report t-values for the coefficients of the total cost and the unit variable cost.

Answer 1

1. True, integration of cost information provides the basis of robust decision analysis.

2. True, the cost of time investment graph presents the information that follows the uses of resources through time, from the moment the production process begins until the company recovers those investod resources through the sale of the product.

3. True, high low cost method cannot be worked in all the situations. It may fail to calculate the current value of fixed cost when the number of sales information is not accurate and not reliable and also relevant range is too far from zero.

4. True, a dummy variable is used in regression analysis to represent the presence or absence of a condition (seasonality)

5. True, in the context cost estimation, linear regression output produced by Microsoft Excel will report t-values for the coefficients of the total cost and unit variable costs.

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