Given Actual Amounts of a Semi-Variable Cost for Various Levels

question 17

Multiple Choice

Given actual amounts of a semi-variable cost for various levels of output,the method that will always give the most reliable measure of the fixed and variable components is the:

• A) high-low method.
• B) linear regression method.
• C) scattergraph method.
• D) account analysis methoD.
• Linear regression will always give the most reliable measure of the fixed and variable components for various levels of output;high-low may give the best line but scattergraph and account analysis rely on judgment.

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Definitions:

Proprietorship

A business firm owned by an individual who possesses the ownership right to the firm’s profits and is personally liable for the firm’s debts.

Operational Efficiency

The capability of an organization to deliver products or services in a cost-effective manner while ensuring high quality.

Public Interest

The welfare or well-being of the general public and society as a whole.

Proprietorship

A type of business ownership where the business is owned and run by one individual who has full control and responsibility.