Asked by aasiyyah ceasor on Jun 26, 2024
Verified
Which of the following are important in estimating the cost of machine maintenance?
A) The relevant range
B) The time period selected
C) The cost driver selected
D) All of the given answers
Machine Maintenance
The routine or periodic upkeep and repairs of machinery to ensure its optimal functioning and prevent breakdowns.
Relevant Range
The range of activity or volume over which the assumptions about cost behavior are valid.
Cost Driver
Any factor which causes a change in the cost of an activity, influencing the costs of business operations directly.
- Learn about different methods used for estimating expenses and their applicability.
- Examine the influences on selecting a cost driver for cost estimation purposes.
Verified Answer
AU
Alexis U AnosikeJun 30, 2024
Final Answer :
D
Explanation :
All of the given factors are important in estimating the cost of machine maintenance. The relevant range is important for determining the range of activity levels over which the cost relationship is valid. The time period selected is important for capturing the appropriate amount of maintenance cost for a given period. The cost driver selected is important for accurately allocating maintenance costs to the appropriate cost objects. Therefore, all of the given factors are important and should be considered when estimating the cost of machine maintenance.
Learning Objectives
- Learn about different methods used for estimating expenses and their applicability.
- Examine the influences on selecting a cost driver for cost estimation purposes.