Question

Which of the following methods for estimating the variable and fixed elements of a mixed cost relies on an evaluation of factors such as production methods, materials specifications, labor requirements, equipment usage, and production efficiency?

Multiple Choice

• Engineering approach

• Least-squares regression

• Account analysis

• High-low method

Answer 1

√ The answer is Account analysis because it is estimate to the cost of producing products and the factors are given in the questions all factors are related to each other. In the given choice, only with the help of account analysis we can determine the factors.

× Engineering approach - It is a systematic used to reach the desired solution to a problem like idea, concept, design etc.

× least-square regression - It is a form of mathematical regression that is detemine the best line fit for set data.

* High low method - It constitutes the total dollars from highest volume of mixed cost i.e. fixed and variable cost and the total dollars of lowest volume.