Calculate the High-Low Method with our free online tool using the input parameters: High Cost, Low Cost, High Unit, Low Unit
Utilize this convenient and free High-Low Method calculator to determine the variable cost per unit, fixed cost, and cost volume effortlessly. With the provided high and low cost and unit values, this online calculator enables you to calculate these essential parameters with ease and simplicity. By utilizing the High-Low Method, you can analyze the relationship between costs and units produced or sold, helping you make informed decisions regarding cost management and volume planning. Take advantage of this efficient tool to streamline your cost analysis and gain valuable insights into your business operations.
- b = (Y2 – Y1) / (X2 – X1)
- T = Y2 – (b × X2) = Y1 – (b × X1)
- y = T + (b × X)
The variables used in the formula are:
b = Variable Cost per Unit
Y2 = High Cost
Y1 = Low Cost
X2 = High Unit
X1 = Low Unit
T = Total Fixed Cost
y = Cost Volume
The High-Low Method is an effective managerial accounting technique employed to separate a mixed cost into its fixed and variable components. By analyzing historical costs at different levels of activity, this method enables the identification of both the fixed and variable elements within the cost. It involves comparing the total cost at the highest and lowest levels of activity to determine the cost behavior pattern. This method is widely used in accounting to gain insights into cost structure and facilitate decision-making regarding cost management and pricing strategies.