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    kspears's Avatar
    kspears Posts: 1, Reputation: 1
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    #1

    Sep 14, 2010, 05:15 PM
    How do you figure out the maintenance cost
    Using the high-low method what is the maintenance cost if:

    High level low level
    Direct labor hour 65200 48900
    Factory overhead 313740 277880
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Sep 14, 2010, 10:54 PM

    I've never seen high low method used in such a manner. It's a method used to differential fixed and variable costs.

    You can use it for this to distinguish what portion of the overhead was based on a rate using DL hours as the base, and what was leftover not using that rate. I've never seen it applied to that, but the math would work the same way.

    Is there an assumption there that the portion not using the rate is the maintenance costs portion? Cause you didn't actually say how the maintenance costs are related to this.

    Here's a thread explaining two different ways to do a high low:
    https://www.askmehelpdesk.com/accoun...od-223233.html
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