Is it possible to compensate for the effects of price instability when preparing cost estimates using high-low or regression techniques?
What will be an ideal response?
Yes, possible ways include:
? Adjusting the data to present all costs in some common dollar measure;
? Using activity measures that are expressed in dollars that move with the price change effects in the cost to be estimated;
? Using a multiple regression approach with a suitable price index as one of the predictor variables.
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