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A limitation of the high-low method is that

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A limitation of the high-low method is that

A limitation of the high-low method is that

▸ it is costly to use because it uses a statistical technique to estimate the cost components.

▸ it can only be used if the levels of activity cover a wide range.

▸ because it is based on only two extreme points, the high and low activity levels, the cost equation may not be truly representative of the cost relationship.

▸ it is complex to calculate.

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Managerial Accounting

Edition: 4^th

Author: Davis

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