Which of the Following Formulas Is Used to Calculate the Variable

question 123

Multiple Choice

Which of the following formulas is used to calculate the variable rate in the high-low method?

• A) Total Cost at High Point - (Fixed Rate × Output at High Point)
• B) Total Cost at High Point - (Step Rate × Output at Low Point)
• C) (High Point Cost - Low Point Cost) ÷ (High Point Output - Low Point Output)
• D) (Absorption Point Cost - Margin Cost) ÷ (High Point Cost + Low Point Cost)

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Definitions:

Price Lining

Grouping product prices into ranges, such as low-, medium-, and high-priced items.

Pricing Tactic

Strategic approaches used to set prices for products or services to achieve business objectives.

Prestige Pricing

Psychological pricing strategy used with goods whose quality is difficult to determine by inspection or for products about which consumers have little solid information.

Price Skimming

Setting the price of a new product higher than expected to recover development costs.