When the High-Low Method of Estimating a Cost Behavior Pattern

question 16

Multiple Choice

When the high-low method of estimating a cost behavior pattern is used:

• A)cost and volume data must be reviewed for outliers.
• B)the direct result of the high-low calculations is the fixed expense amount.
• C)the highest and lowest sales price and volume amounts are used in the calculation.
• D)the resulting cost formula will explain total cost accurately for every value between the high and low volumes.

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Definitions:

Autism

A neurodevelopmental disorder characterized by challenges with social interaction, communication, and by restricted and repetitive behavior.

Asperger's Disorder

A former diagnostic category pertaining to individuals with high-functioning autism spectrum disorders, characterized by difficulties in social interaction and restricted, repetitive patterns of behavior, interests, or activities.

Market Potential

The maximum total sales of a product or service that all companies in a market could collectively achieve in a specific time period under ideal conditions.

Actual Market

The existing marketplace where products or services are being traded, as opposed to potential or targeted markets not yet reached.