QS 21-3 Cost habits estimation-high-low an approach LO P1 The adhering to information is obtainable for a company’s maintenance price over the last 7 months.

You are watching: Using the high-low method, estimate both the fixed and variable components of its maintenance cost.


The adhering to information is easily accessible for a company’s maintenance expense over the last 7 months.
Month maintain Hours maintain Cost
June 9 $ 5,450
July 18 6,900
August 12 5,100
September 15 6,000
October 21 6,900
November 24 8,100
December 6 3,600
Using the high-low method, calculation both the fixed and also variable materials of its maintenance cost.

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$8,100 – $3,600
Variable costs = = $250 per maintain hour
24 – 6
Using the low point, $3,600 = ($250/maint. Hr. × 6 maint. Hrs.) + solved cost.
Therefore, fixed price = $2,100