# Variable costs per unit appears higher than total costs per unit

Trying to solve imagined situation. Have highest and lowest sales quantity and have personnel expenses that are mixed expenses (part is fixed wages; part variable wages - amount depends on sales quantity). And want to calculate amount of fixed and variable wages (split mixed expenses into fixed and variable).

Sales quantity 1700 2400
Personnel expenses (mixed; includes fixed and variable) 300 500

Simple method is highest - lowest method, example here https://www.investopedia.com/terms/h/high-low-method.asp

``````Units: Sales quantity
Costs: Personnel expenses
``````

Calculations:

``````Variable Cost = (Highest Activity Costs - Lowest Activity Costs) / (Highest Activity Units - Lowest Activity Units)
Variable Costs = (500 - 300) / (2400 - 1700)
Variable Costs = 200 / 700
Variable Costs = .28

Fixed Costs = Highest Activity Costs − (Variable Cost × Highest Activity Unit)
Fixed Costs = 500 - (.28 * 2400)
Fixed Costs = -172
``````

Why such situation? A bit mess in my head...

After some tests conclusion is if sales quantity max/min rate (2400/1700) is less than personnel expenses max/min rate, then the formula does not work (shows incorrect variable cost amount per unit).