Which of the following quantitative methods will separate a semi-variable mixed cost into its fixed and variable components with the highest degree of precision?

Question

Quizplus · Accepted Answer

The linear regression method is the best choice for separating a semi-variable mixed cost into its fixed and variable components with the highest degree of precision as it involves using statistical techniques to estimate how changes in an independent variable (such as production units or labor hours) affect the dependent variable (the total cost). This method takes into account all data points, not just the highest and lowest values like the high-low method, and is less subjective than the visual fit method. The simplex method is not relevant to cost analysis.

Which of the Following Quantitative Methods Will Separate a Semi-Variable