A disadvantage of the high-low method of cost analysis is that:
A) it cannot be used when there are a very large number of observations.
B) it is too time consuming to apply.
C) it uses two extreme data points, which may not be representative of normal conditions.
D) it relies totally on the judgment of the person performing the cost analysis.

Question

Quizplus · Accepted Answer

The high-low method only uses the highest and lowest data points, which may not be representative of normal conditions. This can lead to inaccurate cost estimates, especially if there is significant variability in the data.

A Disadvantage of the High-Low Method of Cost Analysis Is