A limitation of the high-low method is that
A)It is costly to use because it uses a statistical technique to estimate the cost components.
B)It is complex to calculate.
C)It can only be used if the levels of activity cover a wide range.
D)Because it is based on only two extreme points,the high and low activity levels,the cost equation may not be truly representative of the cost relationship.

Question

Quizplus · Accepted Answer

The limitation of the high-low method is that it only uses two extreme points, and the cost equation derived from it may not accurately represent the true cost relationship.

A Limitation of the High-Low Method Is That