The Most Serious Shortcoming of the High-Low Method of Estimating

question 15

Multiple Choice

The most serious shortcoming of the high-low method of estimating a mixed cost function is that it:

• A) usually overestimates the total cost.
• B) is based on a very small portion of the available data.
• C) focuses on fixed costs only and ignores variable costs.
• D) can only be used if contribution margin income statements are also being used.