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The high-low method: a. Calculates variable costs per unit by dividing the difference in the high and low activity levels by the high and low costs b. Assumes that the fixed portion of the mixed cost is the lowest monthly cost incurred during the period under consideration c. Allows differentiation between fixed and variable costs when dealing with mixed costs d. Combines the fixed and variable portions of a cost to determine the total cost

The high-low method: a. Calculates variable costs per unit by dividing the difference in the high and low activity levels by the high and low costs b. Assumes that the fixed portion of the mixed cost is the lowest monthly cost incurred during the period under consideration c. Allows differentiation between fixed and variable costs when dealing with mixed costs d. Combines the fixed and variable portions of a cost to determine the total cost

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7E: High-low method Ziegler Inc. has decided to use the high-low method to estimate the total cost and...
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The high-low method:

a. Calculates variable costs per unit by dividing the difference in the high and low activity levels by the high and low costs

b. Assumes that the fixed portion of the mixed cost is the lowest monthly cost incurred during the period under consideration

c. Allows differentiation between fixed and variable costs when dealing with mixed costs

d. Combines the fixed and variable portions of a cost to determine the total cost

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