Which of the Following Is Not a Step in Estimating

question 29

Multiple Choice

Which of the following is not a step in estimating total cost using the high-low method?

• A)Identify the highest and lowest levels of activity.
• B)Visually "fit" a line to the plotted points.
• C)Compute the variable cost per unit.
• D)Calculate the fixed cost using either the high point or the low point.

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Definitions:

Indicator Variable

A variable that takes on values of 0 or 1 to indicate the absence or presence of a categorical effect that may influence dependent variables.

Seasonal Index

Seasonal index refers to a numerical value that is assigned to specific time intervals to measure the seasonal pattern or variation in a data set over a period.

Deseasonalized

Deseasonalized data refers to the removal of seasonal effects from a time series to better identify trends and other underlying patterns.

Seasonal Index

A coefficient that modifies data to account for seasonal effects, facilitating more accurate trend analysis over time.