The high-low method allows you to differentiate between fixed and variable costs when dealing with mixed costs.

Question

Quizplus · Accepted Answer

The high-low method involves analyzing the highest and lowest levels of activity to determine the variable cost per unit, and then using that information to estimate the total fixed cost. This enables you to separate out the fixed and variable components of a mixed cost. Therefore, the statement is true.

The High-Low Method Allows You to Differentiate Between Fixed and Variable