ACCA F5 Budgeting – High-low method
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Great lecture John thanks
Thank you for the comment 馃檪
Sir,
Has expected values in budgeting been omitted from the syllabus?
No, and expected values are explained in full in the lectures on risk and uncertainty.
Right sir, thank you.
You are welcome 馃檪
Sir,
Do you think you are going to give one example for a step-up in fixed costs?
Maybe, but there should not really be a need if you understand what you are doing.
Thank you sir for the lecture.
Will the answer be incorrect if we take any values for the high-low method, other than the highest and the lowest? and why?
It depends on the question.
Strictly you should only ever take the highest and lowest independent variable (taking others would potentially give the wrong answer because that would only work if everything was completely linear).
However, if in the exam there are only three values (and a step-up in fixed costs) then the examiner makes sure that they are linear and so then it does not matter which two you choose.