High-low method commonly used to distinguish the variable & fixed price by analyzing some given data. This price or cost can be of a product, product line, geographical sales region, store etc. This method also used to ascertain a budget.
This method is widely used by companies.
The variable price per unit = Y2 – Y1 (Change in costs) / X2 – X1(Change in units)
This method helps to find out the average cost of a product by analyzing it’s all transaction with lowest & highest price.