The cost estimating approach that uses the two most extreme activity observations is the:
A)scattergraph method.
B)high-low method.
C)visual fit method.
D)regression analysis.

Question

Quizplus · Accepted Answer

The high-low method uses the two most extreme activity observations (highest and lowest) to estimate the cost equation. This method assumes that the difference in cost between the highest and lowest observation is due to the difference in activity. The other options listed (scattergraph method, visual fit method, and regression analysis) do not rely on extreme observations and may not produce accurate estimates in all situations.

The Cost Estimating Approach That Uses the Two Most Extreme