The high-low method may give unsatisfactory results if
A)the points are unrepresentative.
B)volume of activity is heavy.
C)volume of activity is light.
D)the data points all fall on a line.

Question

Quizplus · Accepted Answer

The high-low method relies on selecting two data points, one with the highest level of activity and one with the lowest level of activity, and using those two points to estimate the fixed and variable components of a mixed cost. If those two data points are not representative of the full range of activity levels, then the resulting estimates may be unreliable. Therefore, if the points are unrepresentative, the high-low method may give unsatisfactory results.

The High-Low Method May Give Unsatisfactory Results If