The high-low method provides a reasonable estimate of the fixed and variable costs as long as:
A)it uses eight or more points (instead of simply two).
B)at least one of the two points falls within the relevant range.
C)the high and low points for both activity and total fixed costs are the same.
D)the high and low points reflect the general trend of the data.

Question

Quizplus · Accepted Answer

The high-low method estimates fixed and variable costs based on the highest and lowest levels of activity, assuming these points reflect the general trend of the data. This method does not require a specific number of data points, nor does it require the high and low points to have the same total fixed costs or fall within the relevant range.

The High-Low Method Provides a Reasonable Estimate of the Fixed