{"id":47163,"date":"2024-04-15T22:22:50","date_gmt":"2024-04-15T22:22:50","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=47163"},"modified":"2024-04-15T22:22:50","modified_gmt":"2024-04-15T22:22:50","slug":"method-which-considers-lowest-and-highest-values-of-cost-driver-and-cost-within-relevant-range-is-called","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/method-which-considers-lowest-and-highest-values-of-cost-driver-and-cost-within-relevant-range-is-called\/","title":{"rendered":"Method which considers lowest and highest values of cost driver and cost within relevant range is called"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a97dcd122223\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    low high method                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    constant equation                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    variable equation                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"true\">\r\n                    high low method                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is D. high low method.<\/p>\n<p>The high-low method is a simple method of estimating the variable cost per unit and <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> the fixed cost component of a mixed cost. It does this by using the highest and lowest values of the cost driver and the corresponding costs.<\/p>\n<p>The high-low method is based on the assumption that the cost behavior is linear within the relevant range. This means that the cost changes in direct proportion to changes in the cost driver.<\/p>\n<p>To use the high-low method, you first need to identify the highest and lowest values of the cost driver and the corresponding costs. Once you have this information, you can calculate the variable cost per unit and the fixed cost component as follows:<\/p>\n<p>Variable cost per unit = (Highest cost &#8211; Lowest cost) \/ (Highest activity level &#8211; Lowest activity level)<\/p>\n<p>Fixed cost = Highest cost &#8211; (Variable cost per unit * Highest activity <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> level)<\/p>\n<p>For example, let&#8217;s say that you have the following data for a particular cost:<\/p>\n<p>Activity level (units) | Cost<br \/>\n&#8212;&#8212;- | &#8212;&#8212;&#8211;<br \/>\n100 | 1000<br \/>\n200 | 1500<\/p>\n<p>The high-low method would calculate the variable cost per unit and the fixed cost as follows:<\/p>\n<p>Variable cost per unit = (1500 &#8211; 1000) \/ (200 &#8211; 100) = 25<br \/>\nFixed cost = 1500 &#8211; (25 * 200) = 250<\/p>\n<p>The high-low method is a simple and easy-to-use method of estimating the variable cost per unit and the fixed cost component of a mixed cost. However, it is important to note that the high-low method is only accurate if the cost behavior is linear within the relevant range. If the cost behavior is not linear, then the high-low method will not provide accurate estimates of the variable cost per unit and the fixed cost component.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Method which considers lowest and highest values of cost driver and cost within relevant range is called<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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