Which of the following statements are assumptions underlying cost estimation?

A) Cost behaviour depends on one or a few activities.
B) All costs are production driven.
C) There is a strong correlation between the cost and the cost driver.
D) Cost behaviour depends on one or a few activities AND there is a strong correlation between the cost and the cost driver.

Cost Estimation

The process of predicting the amount of resources, especially money, time, and labor, necessary to complete a project or produce a product.

Strong Correlation

A statistical relationship between two variables where a change in one is strongly associated with a change in the other.

Production Driven

Production driven refers to a business approach that prioritizes the efficiency and volume of production, often at the expense of other factors such as customer demand or innovation.