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A manufacturing company is searching for a method that helps to identify variable cost per unit and fixed cost. In the last meeting, one of

  1. A manufacturing company is searching for a method that helps to identify

variable cost per unit and fixed cost. In the last meeting, one of the

accountants suggested that High-low method should be considered. The

owner learns that you have completed a cost accounting course recently

and seeks your opinion.

Required:

Identify and discuss the possible challenges that management may face

when such method is implemented. (10 marks)

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