Use the information below to answer the following question(s).
The Monroe Company uses the high-low method to estimate the cost function. The information for 2002 is provided below.

-When using the high-low method, the two observations used are the high and low observations of the
A) cost driver.
B) outcome variables.
C) outliers.
D) mixed costs.
E) total pool cost.

Question

Use the information below to answer the following question(s).
The Monroe Company uses the high-low method to estimate the cost function. The information for 2002 is provided below.
 
-When using the high-low method, the two observations used are the high and low observations of the
A) cost driver. 
B) outcome variables. 
C) outliers. 
D) mixed costs. 
E) total pool cost.

Quizplus · Accepted Answer

The high-low method is used to estimate the cost function by using the data of the highest and lowest level of the cost driver. Therefore, the two observations used are the high and low observations of the cost driver.

Use the Information Below to Answer the Following Question(s)