Which characteristic is true of the scatter graph method, high-low method, and regression analysis?
A) All methods will produce the same estimate of variable and fixed costs.
B) All methods use historic data to estimate variable and fixed costs.
C) All methods use only two data points in analyzing a mixed cost.
D) None of these is true.

Question

Quizplus · Accepted Answer

The scatter graph method, high-low method, and regression analysis all use historical data to estimate variable and fixed costs. They do not necessarily produce the same estimate of variable and fixed costs, and regression analysis can use multiple data points, not just two. Therefore, choice B is the most accurate characteristic of these methods.

Which Characteristic Is True of the Scatter Graph Method, High-Low