Consider Camp Rainbows cost estimated in E5-10 using the high-low method and in E5-11 using regression. The

Question:

Consider Camp Rainbow’s cost estimated in E5-10 using the high-low method and in E5-11 using regression. The two methods yielded very different results, especially in their estimates of fixed cost.

Required:

1. Describe the differences in the cost estimates generated by these two methods.

2. Explain why you believe the differences exist.

3. Explain which method is more reliable and why.

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Managerial Accounting

ISBN: 978-0078025518

2nd edition

Authors: Stacey Whitecotton, Robert Libby, Fred Phillips

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Question Posted: Feb 27, 2015 10:00 AM

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Consider Camp Rainbows cost estimated in E5-10 using the high-low method and in E5-11 using regression. The

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Req 1 High Low Method Total cost 2889 5735 of Campers Regressi...View the full answer

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