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5 November, 14:31

What assumption (s) are frequently made when estimating a cost function? A. Variations in the level of a single activity explain the variations in the related total costs. B. Cost behavior is approximated by a linear function within the relevant range. C. Both of the above. D. Neither of the above.

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  1. 5 November, 17:07
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    Answer: The correct answer is "C. Both of the above.".

    Explanation: Generally, when estimating a cost function, assumptions are frequently made that the variations in the level of a single activity have as a consequence and are the cause of the variations that occur in the total related costs.

    It is also assumed that the behavior of a cost can be approximated through a linear function within the relevant range.
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