(Answered) Question the two basic assumptions used in estimating cost

Accounting

Question: The two basic assumptions used in estimating cost behavior are:

1. Variations in the level of a single activity (the cost driver) explain the variations in the related total costs.

2. Cost behavior is approximated by a linear cost function within the relevant range.

Describe the two assumptins used in cost estimation behavior. Give an example of each of the assumptions.

200 words with references

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