Managers can use a variety of methods to estimate the fixed and variable components of a mixed cost. In account analysis, an account is classified as either variable or fixed based on the analyst's prior knowledge of how the cost in the account behaves.

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This statement is true. Account analysis is a commonly used method for separating mixed costs into their fixed and variable components based on the analyst's understanding of how the cost behaves. Other methods include the high-low method, regression analysis, and scattergraph analysis.

Managers Can Use a Variety of Methods to Estimate the Fixed