# ECONOMICS

## COST ACCOUNTING

### COST BEHAVIORS

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
High-low method is:
 A the way the costs alter with changes in the level of output or activity. B a technique for calculating the variable and fixed costs that comprise a semi variable cost by analysing the total costs at two activity levels. C a technique for calculating the fixed costs that comprise a semi variable cost by analysing the prime costs at two activity levels.
Explanation:

Detailed explanation-1: -The high-low method is used to calculate the variable and fixed cost of a product or entity with mixed costs. It takes two factors into consideration. It considers the total dollars of the mixed costs at the highest volume of activity and the total dollars of the mixed costs at the lowest volume of activity.

Detailed explanation-2: -The high-low method is an accounting technique used to separate out fixed and variable costs in a limited set of data. It involves taking the highest level of activity and the lowest level of activity and comparing the total costs at each level.

Detailed explanation-3: -Hi-low is linked to the idea of cost behaviour and is one method for splitting semi-variable costs into their fixed and variable elements. Making a distinction between fixed and variable costs in a semi-variable cost might be used: in product costing. to analyse profitability of a product or department.

Detailed explanation-4: -The formula for the High-Low Method It is calculated by deducting the product of variable cost per unit and the highest activity units from the highest activity cost or by deducting the product of variable cost per unit and lowest activity units from the lowest activity cost.

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