FORMULA TABLE FOR HIGH LOW METHOD
(values are entered in the shaded areas)

FORMULA AUDIT TRACE

STEP 1 -- Calculating Difference in usage and cost from high to low
(low subtracted from high)

STEP 2 -- Calculating variable cost per unit
(cost difference divided by usage difference)

STEP 3 -- Carrying total costs forward

STEP 4 -- Calculating variable cost at the high usage
(usage times variable cost per unit)

STEP 5 -- Calculating variable cost for the low usage
(usage times variable cost per unit)

STEP 6 -- Calculating fixed cost
(total cost minus variable portion)