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)gives accurate results of cost estimation,irrespective of the relevant range.
C)helps in determining the fixed and variable components of a mixed cost.
D)is based on the premise that all data points are necessary to define a linear cost-volume relationship.

Question

Quizplus · Accepted Answer

The high-low method is a technique used in cost accounting to separate fixed and variable costs associated with a mixed cost. It does this by examining the highest and lowest levels of activity and the corresponding total costs, allowing for the calculation of variable cost per unit and the total fixed cost.

The High-Low Method