Weaknesses of the high-low method include all of the following except
A)only two observations are used to develop the cost function.
B)the high and low activity levels may not be representative.
C)the method does not detect if the cost behavior is nonlinear.
D)the mathematical calculations are relatively complex.

Question

Quizplus · Accepted Answer

The statement "the mathematical calculations are relatively complex" is incorrect. In fact, the high-low method is one of the simplest methods for estimating a cost function. The correct weakness is that the method does not detect if the cost behavior is nonlinear. Therefore, the best choice is D.

Weaknesses of the High-Low Method Include All of the Following