Business & Pricing

High-Low Cost Estimation

Fit a two-point linear operating-cost model to the highest and lowest activity observations.

Your numbers

Sample inputs are illustrative. Changing currency changes labels only.

Your result

Preparing the sample calculation…

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How to use this calculator

  1. Enter high activity units, cost at high activity, low activity units, cost at low activity, target activity units.
  2. Choose a display currency, then select Calculate. Results also update after a brief pause while you edit.
  3. Read the result with the assumptions below. Export details or save a second scenario to compare your choices.

Formula and method

Variable unit cost=(high cost−low cost)/(high units−low units); fixed cost=low cost−variable cost×low units.

Assumptions and limitations

Select activity extremes rather than cost extremes. Two observations are sensitive to outliers and do not establish cost behavior.

Worked example

With high activity units = 2000, cost at high activity = 15000, low activity units = 1000, cost at low activity = 10000, target activity units = 1500, estimated variable cost per unit is approximately 5.

What the result means

Fit a two-point linear operating-cost model to the highest and lowest activity observations.

Common questions

How should I interpret estimated variable cost per unit?

Fit a two-point linear operating-cost model to the highest and lowest activity observations.

What should I check before using this result?

Select activity extremes rather than cost extremes. Two observations are sensitive to outliers and do not establish cost behavior.

Methodology and transparency

Calculation specification reviewed on 2026-10-14. Mathematical implementation is tested against independent reference fixtures. This does not imply review by a licensed financial professional. Read the testing and precision policy.