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Expert-verifiedFound in: Page 1119

Book edition
6th

Author(s)
Tracie L. Miller-Nobles, Brenda L. Mattison

Pages
992 pages

ISBN
9780134486833

**Describe the three steps of the high-low method.**

**Step 1: Calculation of variable cost per unit**

**Step 2: Calculation of fixed cost**

**Step 3: Creation and use of equation**

The first step of high-low method is to identify the highest and lowest level of activity and then calculate the variable cost per unit.

Fixed cost can be calculated by subtracting variable cost calculated above from total mixed cost.

Total mixed cost = (Variable cost per unit x Number of units) +Total fixed cost

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