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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › High-Low method
Thank you very much for your help.
One more question.
If the table shows:
Overhead costs Output volume
7000 9400
5688 7600
6334 8500
5446 7300
Here the lowest OC corresponds with lowest OL
But what if:
Overhead costs Output volume
7000 8100
5688 7600
6334 8500
5446 7300
Please confirm, what is the the right way of arriving at VC:
(8500-7300)/(7000-5446) and FC= (7000 – VC*8100)
or:
(8500-7300)/(6334-5446) and FC= (6334 – VC*8500)
I listened to your lectures, but please explain, if I something is missed, because I am really confused, adding to this pre-exam stress, I might just not see the simple things.
Thank you.
Since the cost depends on the output volume, you take the highest and lowest output volume and the associated costs.
So it is (8500-7300)/(6334-5446) and FC= (6334 – VC*8500)