Which characteristic is true of the high-low method, the scattergraph method, and regression analysis?
A)All methods will produce the same estimate of variable and fixed costs.
B)All methods use historic data to estimate variable and fixed costs.
C)All methods use only two data points in analyzing a mixed cost.
D)None of the above is true.

Question

Quizplus · Accepted Answer

All three methods use historic data to estimate variable and fixed costs, making choice B the only correct option. Option A is incorrect because different methods may produce different estimates of variable and fixed costs. Option C is incorrect because the high-low method uses only two data points, but the scattergraph method and regression analysis can use more than two data points.

Which Characteristic Is True of the High-Low Method, the Scattergraph