11 managers apply two criteria to obtain accurate and useful cost functions these cr 4309566

11) Managers apply two criteria to obtain accurate and useful cost functions.  These criteria are ________.

A) plausibility and believability

B) plausibility and reliability

C) reliability and validity

D) believability and plausibility

12) In relation to a cost function, the term reliability means ________.

A) whether the costs and activities can be easily observed

B) whether the cost function conforms to a given mathematical model

C) how well the cost function predicts future costs

D) how well the cost function explains past cost behavior

13) A cost function is an algebraic equation used to describe the relationship between a cost and its cost driver(s).

14) Managers should apply plausibility and reliability to obtain accurate and useful cost functions.

15) When referring to a cost function, plausibility refers to whether you can rely upon the cost function for predicting the future.

16) In a linear mixed cost function, the slope of the function is the fixed cost per unit of the cost driver.

17) Goodness of fit pertains to how well a cost function predicts cost behavior.

18) Cleveland Recreation Center is planning its annual fundraiser.  The event committee has developed the following budget for the event.

Ballroom rental$2,900


Printing$600 plus $9 per guest

Food$29 per guest

Decorations$700 plus $5 per guest

The committee expects 3,000 people will attend the event.


A) Compute the fixed and variable costs of the event.

B) Prepare the cost function.

C) If Cleveland Recreation charges $100 per person, how much money will be raised by this event?

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Cathy, CS.