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Estimating cost is essential in accounting and for that expert use different methods. One of them is a high-low method, and anyone can only go with this effective method only when he will have proper knowledge. Lack of knowledge may create problems, and for that, we are here to give you the exact information through our high-low method homework help services.
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What is High-Low Method?
High –low method is an excellent method of cost estimation where you will get that how with the help of highest activity levels and lowest activity level mixed cost is evaluated. Undoubtedly this is a simple method to find out the cost estimation, but it is very important to know that evaluation takes place only when there are high value and low-value levels. In case of average, as more than 20 students get 60 %, it becomes difficult to get a lower value. So, it is somehow difficult where there is no extremely higher value or lower value to get a proper evaluation.
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What are the important steps for cost estimation in high-low method?
In case of this method, you must follow these following steps as –
Variable cost per unit = (Y2 – Y1) / (X2 – X1)
Now know each term of this formula as,
Y1 = Total cost at the low activity level
Y2 = Total cost of high activity level
X2 = this is high activity level
X1 = this is low activity level
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