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    Analogy, Expert Opinion, & Factors Fuandamental

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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 Preview

    D) Nonrecurring costs were included in the denominator

    Nonrecurring costs are ...

    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

    $2.19

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