Calculation of the cost line using the high-low method tests the lowest cost period to see if it is an outlier.

Name: Calculation of the cost line using the high-low method tests the lowest cost period to see if it is an outlier.
Brand: Quizplus
Rating: 4.7 (32 reviews)

Question

Quizplus · Accepted Answer

The high-low method calculates the variable cost per unit based on the difference between the highest and lowest levels of activity, then uses this to determine the fixed cost component of the cost line. It does not test for outliers in the lowest cost period.

Calculation of the Cost Line Using the High-Low Method Tests