The High-Low Method

question 65

Multiple Choice

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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Definitions:

Excessive Business Profits

Refers to the disproportionately high earnings that a business may make, often seen as beyond what is considered fair or reasonable in relation to its production costs or societal contributions.

Strategy Implementation

The process of putting a chosen strategy into action to achieve an organization's goals and objectives.

Mobilising Resources

The process of identifying, acquiring, and managing the resources needed to achieve specific objectives.

Evaluating Results

The process of analyzing the outcomes of actions or experiments to determine their effectiveness and the extent to which they met the intended objectives.