Page 248 - PM Integrated Workbook 2018-19
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Chapter 9
1.2 Advantages/disadvantages of the high-low method
The high-low method has the enormous advantage of simplicity. It is
easy to understand and easy to use.
It assumes that activity is the only factor affecting costs.
It assumes that historical costs reliably predict future costs.
It uses only two values, the highest and the lowest, so the results may
be distorted due to random variations in these values.
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