To separate the semi-variable costs into their fixed and variable components, one can use which of the following methods?

Question

Quizplus · Accepted Answer

The high-low point method is a technique to separate semi-variable costs into their fixed and variable components. This method identifies the highest and lowest activity levels within a given period and calculates the difference in costs between these levels. The difference in costs is then divided by the difference in activity levels to obtain the variable cost per unit of activity. The fixed cost component can be found by subtracting the variable cost per unit of activity from the total cost at either the highest or lowest activity level. This method is simple and easy to use, and can be used to estimate costs at different activity levels.

To Separate the Semi-Variable Costs into Their Fixed and Variable