Cause-and-effect relationship

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Reference no: EM13120852

Which of the following is NOT a reason for expecting that a cause-and-effect relationship exists between the level of an activity and specified costs.

a. management's knowledge of "how things operate" is a basis for asserting cause and effect.

b. there is a high correlation between the level of an activity and specified costs.

c. a physical relationship exists between the level of activity and costs.

d. a contract specifies that higher activity results in higher costs.

Reference no: EM13120852

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