High Low Method: In this method, the highest level and the lowest level of activity is taken and comparing the total cost at each level. If variable cost charged at same level and fixed cost remain same then, it is possible to identify the fixed and variable cost. Least square regression method: It is a statistical procedure which was using to find the best fit for a set of data points by minimizing the sum of the from the plotted curve. To find out: The reasons for differences between cost prediction on the high low method and least square method.

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Chapter 5, Problem 3.3GBP

To determine

Concept introduction:

High Low Method: In this method, the highest level and the lowest level of activity is taken and comparing the total cost at each level. If variable cost charged at same level and fixed cost remain same then, it is possible to identify the fixed and variable cost.

Least square regression method: It is a statistical procedure which was using to find the best fit for a set of data points by minimizing the sum of the from the plotted curve.

To find out:

The reasons for differences between cost prediction on the high low method and least square method.

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