What is a discontinuous linear cost function? What types of analyses can be done to improve cost control when the data sets indicate a discontinuous linear cost function?

What is a discontinuous linear cost function?

A.

A discontinuous linear cost function is a cost function in which total costs do not change with changes in the level of activity, inputs consumed, or outputs produced in the relevant range of production.

B.

A discontinuous linear cost function is a cost function in which total costs change in proportion to the changes in the level of activity or resources consumed within the relevant range.

C.

A discontinuous linear cost function will either have different slopes throughout the relevant range, or be a series of horizontal lines with zero slope throughout the relevant range.

D.

All of the above.

What types of analyses can be done to improve cost control when the data sets indicate a discontinuous linear cost function? (Select all that apply.)

A.

Conference method

B.

Breakeven analysis

C.

Cost-volume-profit analysis

D.

Industrial engineering method

E.

Quantitative analysis

F.

Account analysis method

What is the goal of an ordinary least squares (OLS) linear regression?

A.The goal of an OLS linear regression is to select the best cost driver from all the existing data available in a traditional costing system which will most reliably predict the values of the curvilinear cost

function.

B.

The goal of an OLS linear regression is to select the best cost driver from all the existing data available in a traditional costing system which will most reliably predict the values of the MOH cost pool.

C.The goal of an OLS linear regression is to select the best cost driver from all the existing data available in a traditional costing system which will most reliably predict the values of the linear cost

function.

D.

The goal of an OLS linear regression is to select the best cost driver from all the existing data available in a traditional costing system which will most reliably predict the values of the heterogeneous cost pool.