High-Low Method

Apply the high-low method of cost analysis to the three cost data groups shown below.

Volume (applicable to each group)	Group A Costs	Group B Costs	Group C Costs
2,000	$6,240	$2,400	$5,760
12,000	30,240	14,400	5,760
16,000	39,840	19,200	5,760
20,000	49,440	24,000	5,760

What cost behavior patterns are apparent? Express each as a cost formula: Total cost = Fixed costs + (Variable cost x Volume).

Group	Fixed costs	+	(Variable cost	x Volume)
A	Answer	+	Answer	x Volume
B	Answer	+	Answer	x Volume
C	Answer	+	Answer	x Volume