Which Method Are Managers Using When They Use Their Judgment

question 67

Multiple Choice

Which method are managers using when they use their judgment to classify costs as variable, fixed, or mixed?

• A)High-low method
• B)Account analysis
• C)Regression analysis
• D)Low-high method

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Definitions:

Estimated Useful Life

The expected period over which an asset remains usable to the owner, impacting depreciation calculations and asset management strategies.

Land Purchase

The acquisition of land, an asset, for the purposes of business operation, investment, or development.

Straight-Line Method

A method of calculating depreciation of an asset, where the cost is evenly spread over its useful life.

Fiscal Year

A 12-month period used for accounting purposes and preparing financial statements, which may not coincide with the calendar year.