The High-Low Method

question 42

Multiple Choice

The high-low method:

• A) Utilizes the average and the mean values of costs to determine fixed and variable costs.
• B) Utilizes the high and low values of aggregate costs to estimate total fixed costs and the unit variable costs.
• C) Utilizes regression analysis to estimate total fixed costs and the unit variable costs.
• D) Requires cost items to be specifically classified as fixed costs or variable costs to be utilized.

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Definitions:

Tragedy

Tragedy is a form of drama based on human suffering that invokes an accompanying catharsis or pleasure in audiences.

Excessive Use

The overuse or misuse of a resource or product, often leading to depletion or damage of the resource and negative externalities.

Common Resources

Natural or man-made resources that are not owned by anyone, cannot be excluded from use, and are available for use by more than one person.

Externality

A consequence of an economic activity experienced by unrelated third parties; it can be either positive or negative.