A better database for estimating cost functions has the following characteristics.

A.

Time periods differ for measuring items included in the dependent variable and the costdriver(s).

B.

Extreme observations are adjusted or removed.

C.

Homogeneous relationships between individual cost items in the dependent variable pool and cost drivers may not be present.

D.

There is nocausal, economically plausible relationship between individual cost items in a heterogeneous mixed pool and a single cost driver.

E.

Fixed costs are allocated as if they are variable costs.