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. Assumes that the fixed portion of the mixed cost is the lowest monthly cost incurred during the period under consideration c. Allows differentiation between fixed and variable costs when dealing with mixed costs d. Combines the fixed and variable portions of a cost to determine the total cost
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. Assumes that the fixed portion of the mixed cost is the lowest monthly cost incurred during the period under consideration c. Allows differentiation between fixed and variable costs when dealing with mixed costs d. Combines the fixed and variable portions of a cost to determine the total cost
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 14MC: Which of the following statements is true regarding average fixed costs? A. Average fixed costs per...
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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. Assumes that the fixed portion of the mixed cost is the lowest monthly cost incurred during the period under consideration
c. Allows differentiation between fixed and variable costs when dealing with mixed costs
d. Combines the fixed and variable portions of a cost to determine the total cost
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