How it works
Variable cost per unit = cost difference/activity difference. Fixed cost = high-activity cost minus variable rate × high activity.
Input definitions
- High-activity units
- Enter the value in the labeled unit.
- Cost at high activity
- Enter the value in the labeled unit.
- Low-activity units
- Enter the value in the labeled unit.
- Cost at low activity
- Enter the value in the labeled unit.
A worked example
- High-activity units
- 1000
- Cost at high activity
- 7000
- Low-activity units
- 500
- Cost at low activity
- 4500
Assumptions & limits
Uses the accounting classifications, periods and policies you enter. Illustrative management-accounting model; it is not an audited statement, filing or determination of local accounting or tax compliance.
Sources & review
Maintained by AnsRio. Methods and examples use automated checks; this does not imply independent professional certification.
Method updated 2026-10-18. Content checked against the stated method and examples. Our verification approach.
Common questions
Should I choose the highest and lowest costs?
Choose the highest and lowest activity levels and their associated costs. Unusual costs at those points can distort the estimate.
How does High-low fixed and variable cost work?
Variable cost per unit = cost difference/activity difference. Fixed cost = high-activity cost minus variable rate × high activity.
What should I check before using High-low fixed and variable cost?
Uses the accounting classifications, periods and policies you enter. Illustrative management-accounting model; it is not an audited statement, filing or determination of local accounting or tax compliance.