A Method That Estimates Cost Behavior by Connecting the Costs

question 96

Multiple Choice

A method that estimates cost behavior by connecting the costs linked to the highest and lowest volume levels on a scatter diagram with a straight line is called the:

• A) Scatter method.
• B) High-low method.
• C) Least-squares method.
• D) Break-even method.
• E) Step-wise method.

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Definitions:

Elasticity

A measure of a variable's sensitivity to a change in another variable, used in economics to describe how the quantity demanded of a good responds to changes in price or income.

Corporate Strategy

A strategy that sets long-term direction for the total enterprise.

Business Strategy

A strategy that identifies how a division or strategic business unit will compete in its product or service domain.

SBU

Acronym for Strategic Business Unit, a separately managed division or unit of a company that has its own mission, objectives, and competitors.