One Underlying Assumption of the High-Low Estimation Method Is That

question 82

True/False

One underlying assumption of the high-low estimation method is that all costs are either fixed or proportional.

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Definitions:

Finished Goods

Items that are finished being manufactured and are prepared for sale.

Cost Classifications

This refers to the categorization of costs based on their nature, behavior, or decision-making needs, such as fixed vs. variable costs, direct vs. indirect costs, or product vs. period costs.

Sales Commission

A form of payment to a salesperson for selling a product or service, typically a percentage of the sale amount.

Product Cost

The total cost incurred to create a product, encompassing direct materials, direct labor, and overhead costs.