1. What is the scattergraph method, and why is it used? Why is a scattergraph a good first step in separating mixed costs into their fixed and variable components?
2. Describe how the scattergraph method breaks out the fixed and variable costs from a mixed cost. Now describe how the high-low method works. How do the two methods differ?
3. What are the advantages of the scattergraph method over the high-low method? The high-low method over the scattergraph method?