In Applying the High-Low Method, Which Months Are Relevant A)January and February
B)January and April
C)February and April
D)February

question 147

Multiple Choice

In applying the high-low method, which months are relevant? $\begin{array}{llr}\text { Month } &\text { Miles } &\text { Total Cost }\\\hline\text { January } & 80,000 & \$ 192,000 \\\text { February } & 50,000 & 160,000 \\\text { March } & 70,000 & 188,000 \\\text { April } & 90,000 & 260,000\end{array}$

• A)January and February
• B)January and April
• C)February and April
• D)February and March

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Definitions:

Long-Term Equipment Lease

An agreement where a physical asset is rented for a longer duration, often exceeding one year, allowing the use of the asset without purchasing it.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, remaining constant over a period.

Per Unit Basis

A method of quantifying costs, revenues, or other financial metrics on the basis of a single unit of production or service.

Activity

A specific task or action that is part of a process or contributes to the completion of a project.