In applying the high-low method, which months are relevant?
A) January and February
B) January and April
C) February and April
D) February and March

Question

In applying the high-low method, which months are relevant? 
A) January and February 
B) January and April 
C) February and April 
D) February and March

Quizplus · Accepted Answer

The high-low method requires selecting the two extreme points, one with the highest activity level and the other with the lowest activity level. In this case, the data provided does not indicate which month represents the highest and which represents the lowest activity level. However, by selecting February and April, we can determine the variable cost per unit and the fixed cost component for the period of January to April. Choosing January as one of the extreme points would not be useful because we would not have another month to compare it to, and choosing March would not allow us to capture the full range of activity levels in the data.

In Applying the High-Low Method, Which Months Are Relevant