The High-Low Method Can Be Used to Approximate a Cost

question 21

Multiple Choice

The high-low method can be used to approximate a cost function.A disadvantage of this method is ________.

• A)the choice of the high and low points is subjective
• B)it is difficult to use
• C)it provides information about the reliability of the cost estimates
• D)it requires less past cost data than account analysis

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Definitions:

Imports

Goods and services bought by a country from other countries.

NAFTA

The North American Free Trade Agreement (NAFTA) was a treaty among the United States, Canada, and Mexico that eliminated most tariffs and trade barriers between the countries, in effect from 1994 to 2020.

Trade Deficit

A scenario in which a nation's expenditure on imported goods and services surpasses its revenue from exports, resulting in a greater outflow of money than inflow.

Trade Surplus

A situation in which a country exports more goods and services than it imports.