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What is High-Low Method in Cost Analysis about?

The High Low Method uses the highest and lowest activity levels and their associated costs to determine the fixed and variable components of a mixed cost. The variable cost per unit is calculated by taking the difference between the highest and lowest total costs and dividing by the difference between highest and lowest activity units. The fixed cost can then be found by subtracting the total variable cost at a given activity level from the total cost. An example demonstrates calculating the expected factor

Author

Samreen Lodhi

Language

EN