Hi/Lo Method for Determining Fixed & Variable costs; Pricing

Question 1

What is the High Low Method used for?

Answer 1

used to identify the level (£ value) of fixed costs and the level (£ value) of variable costs

Question 2

What are the steps for hi lo method?

Answer 2

(Highest cost-lowest cost)/(highest unit-lowest unit)=VC per unit
FC=total cost for 1 month/year - (VCxUnit for month/year)
MC=FC+VC(total vc=vc per unit x units)