The high-low method requires:
A) The identification of fixed costs so variable costs can be estimated.
B) The identification of variable costs so fixed costs can be estimated.
C) The use of all data levels within the timeframe.
D) Two activity levels within the timeframe.

Question

Quizplus · Accepted Answer

The high-low method requires the use of two activity levels within the timeframe. By using the highest and lowest levels of activity and their corresponding costs, the high-low method allows for the estimation of both fixed and variable costs. Therefore, option D is the correct answer.

The High-Low Method Requires