Which of the Following Is a Strength of the High-Low

question 44

Multiple Choice

Which of the following is a strength of the high-low advantage method?

• 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 behaviour is nonlinear.
• D)The method is easy to apply.

Recognize the sequence of budget preparation and the interconnectivity of budgets.

Calculate the budgeted volume of production based on expected sales, ending, and beginning inventory.

Identify the role and impacts of flexible budgeting in managing changes in levels of activity.

Understand the relationship between sales, production, and subsequent budgets in the budgeting hierarchy.

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Definitions:

Feasibility Studies

Investigations into the practicality, viability, and potential success of a proposed project or system.

Prototypes

Early samples, models, or releases of a product built to test a concept or process or to act as a thing to be replicated or learned from.

Process Innovations

Involve new or improved ways of manufacturing the product or providing the service.

Product Innovations

Involve the use of new or improved design principles or technologies for incorporation in products or services.