Which of the Following Statements Is Correct About the High-Low

question 120

Multiple Choice

Which of the following statements is correct about the high-low method?

• A)The high-low method is complicated to apply.
• B)The high-low method is effective for periods in which activity is particularly high or low.
• C)Generally,managers can obtain more accurate information from other methods of cost analysis that use a larger number of data points.
• D)Generally,managers use the high-low method because it has no drawbacks or limitations.

Comprehend the use of statistical control charts in monitoring cost variances.

Understand the treatment and implications of material price variances.

Understand the applications of standard cost systems in production and cost control.

Identify the difference between theoretical standards and practical standards and their effect on employee motivation and performance evaluation.

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Definitions:

Midpoint Formula

A method for calculating price elasticity of demand or price elasticity of supply that averages the starting and ending prices and quantities when computing percentages.

Price-elasticity Coefficient

A measure that indicates how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage change.

Midpoint Formula

A method used in mathematics to find the midpoint or center point between two points on a line segment by averaging their x and y coordinates.

Candy Bars

Snack food items made primarily of chocolate and often contain fillers like nuts, caramel, or nougat.