The High-Low Method

question 8

Multiple Choice

The high-low method

• A)is a useful means of predicting the highest cost a company will incur in the operating period.
• B)is a useful means of separating fixed and variable elements from a mixed cost.
• C)is more time-consuming than the scatter diagram method.
• D)is more complex than the use of linear regression analysis.

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Definitions:

Gross Private Domestic Investment

The total capital investment in an economy by private sector entities, excluding government spending.

Durable Goods

Goods not for immediate consumption that can be used over a period of time, such as appliances, cars, and furniture.

Business Inventories

The stocks of goods and materials that firms hold for the purpose of sale or input into production, often used to meet consumer demand or continue production.

Welfare Benefits

Financial assistance provided by the government to individuals or groups in need, aiming to support well-being and economic stability.