Calculating Overhead Cost Using the High-Low Method
Calculating overhead costs using the high-low method is a crucial process in understanding and managing operational expenses…
- Enter the high and low values…
- Enter the average value…
- Click ‘Calculate’…
The high-low method calculates overhead costs by taking the average of the high and low values, then multiplying it by the average…
| High | Low | Average | Overhead Cost |
|---|---|---|---|
| 500 | 300 | 400 | 400 |
| Year | High-Low Method | Other Method |
|---|---|---|
| 2020 | 100,000 | 110,000 |
- Always use the most recent data…
- Consider seasonal fluctuations…
What is the high-low method?
The high-low method is a way to calculate overhead costs by taking the average of the high and low values…
Learn more about the high-low method from the U.S. Government