Final answer:
The statement is True; the variable cost per unit under the high-low method is calculated by dividing the change in total costs by the difference in activity levels.
Step-by-step explanation:
Under the high-low method, the statement that the variable cost per unit is computed by dividing the change in total costs by the high minus low activity level is True. The high-low method is a way to estimate the variable and fixed components of a firm's cost structure. It takes the total costs at the highest level of activity and the total costs at the lowest level of activity, and then uses the difference in total costs and the difference in activity levels to calculate the variable cost per unit.
We obtain average variable cost when we divide variable cost by the quantity of output. For example, if the variable cost of producing 80 haircuts is $400, the average variable cost is $5 per haircut ($400 divided by 80 haircuts). This calculation is essential for firms to understand their cost structure and potential profitability.