Weaknesses of the High-Low Method Include All of the Following

question 74

Multiple Choice

Weaknesses of the high-low method include all of the following EXCEPT

• A)only two observations are used to develop the cost function.
• B)the high and low activity levels may not be representative.
• C)the method does not detect if the cost behavior is nonlinear.
• D)the method is relatively complex and difficult to apply.

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Definitions:

Developed Countries

Nations with high levels of industrialization, a high standard of living, and developed infrastructure.

Industrialization

The process by which an economy is transformed from primarily agricultural to one based on the manufacturing of goods, involving increased mechanization.

Per Capita GDP

A measure of the economic output of a nation per individual, calculated by dividing the country's gross domestic product by its total population.

Developed Countries

Nations with advanced economies, high standards of living, and well-established infrastructure and government systems.