Purchase Solution

The solution to High-Low method

Not what you're looking for?

Ask Custom Question

High-Low Method

Manchester Foundry produced 45,000 tons of steel in March at a cost of £1,150,000. In April, the
foundry produced 35,000 tons at a cost of £950,000. Using only these two data points, determine the
cost function for Manchester.
What is the slope?

Purchase this Solution

Solution Summary

High-Low Method example and general explanation

Solution Preview

We have these data points:

35,000 tons costs £950,000
45,000 tons costs £1,150,000

Notice the difference between the high of 45,000 tons produced and 35,000 tons produced is (45,000 tons - 35,000 tons) = 10,000 tons with a matching change in costs of (£1,150,000 - £950,000) = £200,000.
We can calculate the variable cost per ton at £20 per unit (£200,000 / ...

Purchase this Solution


Free BrainMass Quizzes
Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking