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Bpp practice & revision kit / question 15.2 high low method – flex bugdeting

This topic has 1 reply, 1 voice, and was last updated 13 years ago by periqueta.

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November 3, 2012 at 6:57 pm #54919
periqueta
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Hi!
I hope someone can help me with a problem with this exercise.
Why I should take out direct material cost when applying the high low method to get the variable cost per unit?
Many thanks in advance
November 3, 2012 at 8:24 pm #106169
periqueta
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- Topics: 11
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Oh, I think I have my own answer. It is because the direct material costs are 100% variable costs. We use the high low method to split the semi-variable cost.
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