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An analyst was developing a cost factor to estimate non-recurring tooling as a function of the recurring tooling cost. If the factor was constructed as:
Nonrecurring Tooling Cost
--------------------------------------
Total (Recurring + Nonrecurring) Tooling Cost
The mistake was:
A) Recurring tooling would not be a good cost driver
B) You can't have a factor with a cost-to-cost relationship
C) The total cost should be in the numerator
D) Nonrecurring costs were included in the denominator
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Solution Summary
The mistake was:
A) Recurring tooling would not be a good cost driver
B) You can't have a factor with a cost-to-cost relationship
C) The total cost should be in the numerator
D) Nonrecurring costs were included in the denominator
Solution Preview
D) Nonrecurring costs were included in the denominator
Nonrecurring costs are ...
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