Q493
Method which considers lowest and highest values of cost driver and cost within relevant range is called
A.
low high method
B.
constant equation
C.
variable equation
D.
high low method
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Method which considers lowest and highest values of cost driver and cost within relevant range is called high low method. In cost accounting, the high-low method is a way of attempting to separate out fixed and variable costs given a limited amount of data. The high-low method involves taking the highest level of activity and the lowest level of activity and comparing the total costs at each level.