Using the High-Low Method,the Variable Rate of a Mixed Cost

question 89

Multiple Choice

Using the high-low method,the variable rate of a mixed cost equals

• A)total cost at high point - (variable rate ´ output at high point)
• B)total cost at high point - (variable rate ´ output at low point)

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Definitions:

Asset Intensity

Amount of assets needed to generate a given level of sales.

Risk-Return Tradeoff

The principle that potential return on investment increases with the degree of risk.

Capital Investment Analysis

Process of comparing the costs and benefits of a long-term asset investment.

Leveraged Buyout

Acquiring a company using a significant amount of borrowed money (leverage) to meet the cost of acquisition, often using the assets of the company being acquired as collateral.