When using the high-low method, the "low" point should be chosen as the data point with the lowest volume (not the lowest cost).

Question

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The high-low method is used to separate a mixed cost figure into its variable and fixed components. In this method, the "high" and "low" points represent two data points with the highest and lowest volumes, respectively. It is important to choose the low point with the lowest volume to ensure accurate calculation of the variable cost per unit.

When Using the High-Low Method, the "Low" Point Should Be