Question Details

The major advantages of quantitative methods



1) Machine-hours is a more economically plausible cost driver of machine maintenance than number of direct manufacturing labor-hours. 


2) The larger the vertical difference between actual costs and predicted costs the better the goodness of fit. 


3) The major advantages of quantitative methods are that they are objective, so managers can use them to evaluate different cost drivers.


4) A flat or slightly sloped regression line indicates a strong relationship between the cost driver and costs. 


5) To implement ABC systems, managers must identify a cost driver for each activity.





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