To Estimate the Unit Variable Cost Using the High-Low Method

question 117

True/False

To estimate the unit variable cost using the high-low method, identify the highest and lowest level of activity and compute the slope of the line.

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Definitions:

Operating Activities

are the day-to-day functions of a business that involve the production, sales, and delivery of a company's products and services.

Net Cash

The difference between a company's total cash inflows and outflows within a given period.

Investing Activities

Transactions related to the acquisition or disposal of long-term assets and investments, used to assess a company's growth projects and capital expenditure.

Net Cash

The difference between the cash inflows and outflows in a given period, indicating the net change in a company's cash position.