When using the high-low method,fixed costs are computed before the variable component is computed.

Question

Quizplus · Accepted Answer

In the high-low method, the variable cost per unit is computed first by dividing the difference in total costs between the high and low activity levels by the difference in units produced at these levels. Fixed costs are then calculated by subtracting the total variable costs at either activity level from the total costs at the same level.

When Using the High-Low Method,fixed Costs Are Computed Before the Variable