Question: James Brooks estimated the variable and fixed components of his companys utility costs using the high-low method. He is concerned that the cost equation that

James Brooks estimated the variable and fixed components of his company’s utility costs using the high-low method. He is concerned that the cost equation that resulted from the high-low method might not provide an accurate representation of his company’s utility costs. What is the inherent weakness of the high-low method? What alternative approach might Brooks use, and what are its advantages?

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