In Applying the High-Low Method, Which Months Are Relevant

question 22

Multiple Choice

In applying the high-low method, which months are relevant?

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

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Definitions:

Direct Labor Budget

A financial plan that estimates the cost of direct labor required to meet the production needs of a company over a specific period.

Direct Labor-Hours

The total hours of work directly contributed by laborers to produce goods, often used in costing and productivity calculations.

Direct Labor Rate

The cost of labor per hour for workers directly involved in the manufacturing process.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, helping manage liquidity and ensuring availability of cash.