Costing practice cba

jojo1979
jojo1979 Feels At HomeRegistered Posts: 75
Hi all

I was wondering if anyone could help. I have been going through the practice CBA for costing and am struggling to find where one of the answer figures have come from. Its task 2.1 ans the fixed element figure. I am ok with getting the variable figure but cannot for the life of me understand where the fixed figure has come from, if anyone can help i would be grateful. AM really really dreading this one :-(

Comments

  • sdv
    sdv Experienced Mentor Registered Posts: 585
    to find the fixed costs you have to use the Hi-Low method

    information you have been given in the question

    .............................................Units......................semi variable costs

    .............................................3000......................£7 380
    Less
    from table ..............................1200.....................£3 780

    equals only variable costs ........1800......................£3,600 therefore cost VC per unit =£2


    Total costs.............................£7 380 (3000 units)..........£ 3 780 (1200 Units)
    less
    Variable cost @£2 per unit.......£6,000.............................£2,400
    equals
    Fixed Cost..............................£1,380.............................£1,380
  • jojo1979
    jojo1979 Feels At Home Registered Posts: 75
    Hiya,

    Thank you for explaining that understand it now. Just hope it stays in there for tomorrows exam.
    Thank you again.

    Jo
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