The high-low method
A) calculates variable costs per unit by dividing the difference in the high and low activity levels by the high and low costs.
B) assumes that the fixed portion of the mixed cost is the lowest monthly cost incurred during the period under consideration.
C) allows differentiation between fixed and variable costs when dealing with mixed costs.
D) combines the fixed and variable portions of a cost to determine the total cost.

Question

Quizplus · Accepted Answer

The high-low method is used to separate mixed costs into their fixed and variable components by analyzing the highest and lowest activity levels and their associated costs.

The High-Low Method