10 THE HIGH-LOW METHOD USES ONLY TWO DUCTING VARIABLE EXPENSES TO OB...
5-10 The high-low method uses only two
ducting variable expenses to obtain contribution
points to determine a cost formula. These two
margin, and then deducting fixed expenses to
points are likely to be less than typical since
they represent extremes of activity.
obtain net operating income. The traditional ap-
proach organizes costs by function, such as pro-
duction, selling, and administration. Within a