The high-low method is used in cost accounting to estimate fixed and variable costs based on a business's highest and lowest levels of activity. By focusing on these extremes, the high-low method ...

Companies focus on their fixed costs to maximize profits at the end of the fiscal year. If a company's fixed costs are too high, the company might not create a profit for that fiscal period.

So many of a business’ costs fluctuate based on operations. For example, the more products you make, the more you’ll spend on materials to make them. However, there are several important costs that ...