The high-low method is generally less accurate than the least-squares regression method for analyzing the behavior of mixed costs.

Question

Quizplus · Accepted Answer

The high-low method only uses two data points (the highest and lowest levels of activity), which can result in a less accurate estimation of fixed and variable costs. The least-squares regression method uses all the available data points and produces a more accurate estimation of the cost behavior.

The High-Low Method Is Generally Less Accurate Than the Least-Squares