Both the visual-fit and high-low methods of cost estimation have inherent limitations. Briefly identify the major deficiency associated with each method.
What will be an ideal response?
The visual-fit method suffers from a lack of objectivity. Given that the cost line is created by visual approximation or "eyeballing," different cost analysts will likely produce different lines. The high-low method, on the other hand, is objective. However, it uses only two data points and ignores the rest, thus generalizing about cost behavior by relying on only a very small percentage of possible data observations.
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Your uncle has just started a business and comes to you with a question. "I'm confused. I have a memo included with my bank statement indicating a $45 service charge for printing new checks. Since you're an accounting major, maybe you can explain to me
why they call it a ‘debit memorandum,' even though they are deducting this amount from my account. When I took Accounting in school, I could have sworn that a decrease in the Cash account would be a credit and not a debit. REQUIRED: In a short paragraph, explain this issue to your uncle.
Points are established for varying RFM levels; the more points, the more attractive the customer
Indicate whether the statement is true or false
Explain the concept of nonstore retailing, giving one example of a well-known product that has been marketed this way
What will be an ideal response?
The profit margin and asset turnover ratios are important measures, but they have a limitation. Describe these limitations and discuss the ratio that can be used to overcome these deficiencies