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Explain the advantage and disadvantages of high-low method of cost estimation.

      

Explain the advantage and disadvantages of high-low method of cost estimation.

  

Answers


Martin
Advantages of high-low method

(i). Method is easy to use
(ii). Not many data are needed
(iii). Visually it gives the general direction of the trend

Disadvantages

(i). Choice of the high and low points is subjective
(ii). Method does not use all available data
(iii). Cannot be used for more than one independent variable
(iv). Not possible to defend the results statistically
(v). If the two points are outliers, the predictive equation will be wrong.
(vi). Method may not be reliable
marto answered the question on February 15, 2019 at 08:54


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