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The high - low method: multiple choice 2 uses ALL of the data to derive its estimates of the variable cost per unit and total
The highlow method:
multiple choice
uses ALL of the data to derive its estimates of the variable cost per unit and total fixed expense.
should only be used if the scattergraph plot shows an approximately linear relationship between the level activity and the total cost.
recommends choosing the high and low data points based on the highest and lowest total cost.
provides cost estimates that usually have a high R statistic.
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