Costing practice cba

jojo1979

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 :-(

sdv

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

Hiya,

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

Jo