Page 15 - PowerPoint Presentation

RECAP

High-low Method

• The costs should be from the same fiscal period,

i.e. the effect of inflation should be negated.

• When working with figures derived under different

inflationery conditions, all figures should first be

INDEXED to the same year.

• Thereafter the high-low method can be Applied.

• The selection of high and low is based on the

activity level, not on the cost or value level.

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