what is the high low method 
in cost accounting the high low method is a way of attempting to separate out fixed and variable costs given a limited amount of data the high low method involves taking the highest level of activity and the lowest level of activity and comparing the total costs at each level if the variable cost is a fixed charge per unit and fixed costs remain the same it is possible to determine the fixed and variable costs by solving the system of equations it is worth being cautious when using the high low method however as it can yield more or less accurate results depending on the distribution of values between the highest and lowest dollar amounts or quantities understanding the high low methodcalculating the outcome for the high low method requires a few formula steps first you must calculate the variable cost component and then the fixed cost component and then plug the results into the cost model formula first determine the variable cost component variable cost hac lowest activity costhaus lowest activity unitswhere hac highest activity costhaus highest activity unitsvariable cost is per unit begin aligned text variable cost frac text hac text lowest activity cost text haus text lowest activity units textbf where text hac text highest activity cost text haus text highest activity units text variable cost is per unit end aligned variable cost haus lowest activity unitshac lowest activity cost where hac highest activity costhaus highest activity unitsvariable cost is per unit next use the following formula to determine the fixed cost component fixed cost hac variable cost haus begin aligned text fixed cost text hac text variable cost times text haus end aligned fixed cost hac variable cost haus use the results of the first two formulas to calculate the high low cost result using the following formula high low cost fixed cost variable cost ua where ua unit activity begin aligned text high low cost text fixed cost text variable cost times text ua textbf where text ua text unit activity end aligned high low cost fixed cost variable cost ua where ua unit activity 