Which of the following is incorrect regarding cost behavior equations? A. The y-intercept value in a cost behavior equation represents total expected costs when the activity level is zero. B. The relevant range is defined as the range of activity over which a cost behavior equation is valid. C. If costs are nonlinear, managers can develop cost behavior equations by defining multiple relevant ranges. D. If a data set only contains two data points, the high low method and regression analysis will yield different cost behavior equation. E. The account analysis method is considered the most subjective tool available for developing a cost behavior equation.

E) The account analysis method is considered the most subjective tool available for developing a cost behavior equation.

Explanation:

Cost behavior equations show us how costs change depending on the output level. Generally costs equations follow this model  TC = F + VX, where TC is total cost, F is fixed costs, V is variable cost and X is output level. Generally units are located on the X axis and costs ($) in the Y axis.

The account analysis method estimates different costs associated with a product and divides them into variable, fixed and mixed. There is nothing subjective with this method, since each type of classification of costs has a reason behind it, e.d. fixed costs do not vary as the output level varies, variable costs on the other hand vary as the output level varies.

answer; descriptive statistics;