What Data Point Can Be Used to Solve for the Fixed

question 61

Multiple Choice

What data point can be used to solve for the fixed cost component when using the high-low method?

• A)The "high" month
• B)Either the "high" or the "low" month
• C)The "low" month
• D)Any month in the data set

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Definitions:

Prior Period Adjustment

Corrections of material errors related to a prior period or periods, excluded from the determination of net income.

Retained Earnings

The portion of a company's profits that is kept or retained for reinvestment in the business, rather than being distributed to shareholders as dividends.

Stock Split

A corporate action to increase the number of outstanding shares by issuing more shares to current shareholders, proportionally decreasing the stock price.

Shares Outstanding

The total number of a company's shares of stock that are owned by shareholders, including both public investors and company insiders.