Budgeting Exam

Sammmy88

I need some help....

On the flexed budget question in section 2 how do you work out the equipment hire??

Thanks

angi13

Hi,
Equipment hire: step cost increases at every 8,000 units.
Budgeted units are 63,000/8,000units = 7.875 round up to 8
Budgeted cost £32,000/8 = £4,000 every 8,000 units increase.

Actual units 68,000/8,000 units = 8.5 round up to 9
9 x £4,000 = £36,000 flexed cost

Hope this would help you.

Good luck