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Answer :
Final answer:
The statement that a scatter diagram approach gives an exact approximation of measuring fixed costs is false, as scatter diagrams only provide rough estimates and more accurate methods are available for precise calculations.
Explanation:
The scatter diagram approach gives an approximation of measuring the fixed costs. This statement is false. Scatter diagrams, or scatter plots, are graphical tools used to display and assess the relationship between two variables. In the context of cost analysis, a scatter diagram can illustrate the relationship between the total cost and the level of activity or volume, helping to estimate the variable and fixed components of the total cost.
However, scatter diagrams can only provide a rough estimate of these relationships. More accurate methods, such as the high-low method or regression analysis, are used for precisely determining the fixed and variable components of a cost structure.
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