After reading Appendix 5A and reviewing the online videos, you should have a good understanding of the various tools management accountants might use to create a cost formula for a mixed cost (both variable and fixed components). The three methods outlined in Appendix 5A are the scattergraph method, the high-low method, and the method of least squares (regression).

For this discussion, I'd like you to tell me which method you think is most practical for use in "the real world" for purposes of estimating and budgeting for future costs. Is there a method that might be more objective but might end up being less reliable? Why might this be? Alternatively, is there or should there be room for subjectivity in estimating future mixed costs?