Question Details

Misinterpretation of data can arise when fixed costs are reported




1) Data collection problems can arise when extreme values of observations occur.

2) Misinterpretation of data can arise when fixed costs are reported on a per unit basis. 


3) Inflation can distort data that are compared over time so purely inflationary effects should be removed.


4) Fixed costs are sometimes allocated to individual products as part of the standard costing system. When this is the case, they should be treated as variable costs for purposes of future cost estimation.





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