High-Low Method

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.

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