When using the high-low method, the numerator of the equation that determines the slope is the ________.
A) difference between the positive and negative values of dependent and independent variables
B) difference between the fixed cost and variable cost associated with the cost driver
C) difference between the high and low observations of the cost driver
D) difference between the costs associated with highest and lowest observations of the cost driver

Question

Quizplus · Accepted Answer

The numerator in the equation for determining the slope (variable cost per unit) in the high-low method is the difference in total costs between the highest and lowest levels of activity (cost driver). This method is used to separate the fixed and variable components of a mixed cost.

When Using the High-Low Method, the Numerator of the Equation