Using the high-low method, which of the following could be used to calculate the intercept?
A) Total cost at highest cost driver level - (Variable cost per unit times the highest level)
B) Total cost at lowest cost driver level - (Variable cost per unit times the lowest level)
C) Either of the above
D) Neither of the above

Question

Quizplus · Accepted Answer

Both A and B are correct methods for calculating the intercept in the high-low method. The intercept represents the fixed costs, and either the highest or lowest activity level can be used to calculate it, once the variable cost per unit is known.

Using the High-Low Method, Which of the Following Could Be