For each of the following statements, indicate whether the statement is true or false.

a. The high–low method is superior to regression analysis because the high–low method consistently uses the highest and lowest activity levels in each period.

b. The equation for total costs is represented as x = b + a(y).

c. The contribution margin income statement is primarily used for internal decision making and classifies costs by behavior rather than by their function in the company.

d. The main reason to separate costs into variable and fixed costs is to comply with reporting requirements to outside users.

e. Sunk costs are relevant for current decisions because they are the actual costs incurred during the period.