(Appendix 2A)One of the Questions That Needs to Be Asked

Essay

(Appendix 2A)One of the questions that needs to be asked before data from regression analysis is used to develop a cost function is whether the relationship between the cost and the cost driver is economically plausible. Explain what this means. In addition, give an example of a cost with one cost driver that would be economically plausible and an example of one cost driver that would not be economically plausible.