Comparing High-Low Method and Least-Squares Regression Results
Consider Camp Sunshine’s cost estimated in E5-9 using the high-low method and E5-10 using regression. The two methods yielded very different results, especially in their estimates of fixed cost.
Required:
1. Describe the differences in the cost estimates generated by these two methods.
2. Explain why you believe the differences exist.
3. Explain which method is more reliable and why.
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