Bgt  step cost
MWAUGH1983
Registered Posts: 420 Dedicated contributor 🦉
Hi,
Step cost are proving to be a bind.
On the practice assessment 1 on question 2.2 on operating reprt how are figures calculated for energy and equipment?  I know there a variable element but where is the fixed part worked out?
Cheers
Martin
Step cost are proving to be a bind.
On the practice assessment 1 on question 2.2 on operating reprt how are figures calculated for energy and equipment?  I know there a variable element but where is the fixed part worked out?
Cheers
Martin
0
Comments

High Low Method0

Hello,
For the semivariable cost: you're already given the variable cost per unit so you multiply this with the amount of units and the remaining cost if fixed.
I just realised your exam is today. Hope it went well!!0 
Hey missm4ry4m,
Cheers for that; when you say the rest is fixed what would that be the remaining of  would that be the budget amount for say energy?
Well I did ok just think I lost marks on the work schedule and also this the written element were a bit ropey as well and I didnt finish the last question. Nothing I can do just wait the 6 wks.
Have you done bgt?
Martin0 
You know that the energy budget for 63000 units is 151000. You are also told that 63000x2 is the variable part of this figure, hence the fixed portion must be 151000 minus (63000x2) = 25000.
When applying to this fixed amount to the flexed budget, you get 25000 + (68000x2) = 161000.
A little bit late I'm afraid but I hope the exam went well nevertheless.0 
Hi
Nps1976 explained it perfectly! Good luck with your result.. Meanwhile concentrate on your next unit!0 
And for equipment, you know the budget is £32000 for 63000 units and this figure is valid up to the next multiple of 8000. Therefore you know that the next stepped increase is due at 64000 units. Up to this point, there have been 8 steps in cost (64000/8) therefore each stepped increase must be 32000/8 = 4000.
Your flexed budget is for 68000 units which you now know only results in one extra stepped cost increaseas it is between 64000 and 72000 units, therefore the flexed budget must be 32000 + 4000 = £360000
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 18.9K For AAT students
 265 NEW! Qualifications 2022
 147 General Qualifications 2022 discussion
 9 AAT Level 2 Certificate in Accounting
 42 AAT Level 3 Diploma in Accounting
 64 AAT Level 4 Diploma in Professional Accounting
 8.9K For accounting professionals
 23 coronavirus (Covid19)
 274 VAT
 92 Software
 274 Tax
 138 Bookkeeping
 7.3K General accounting discussion
 193 AAT member discussion
 3.8K For everyone
 38 AAT news and announcements
 352 Feedback for AAT
 2.8K Chat and offtopic discussion
 590 Job postings
 17 Who can benefit from AAT?
 36 Where can AAT take me?
 44 Getting started with AAT
 26 Finding an AAT training provider
 48 Distance learning and other ways to study AAT
 25 Apprenticeships
 65 AAT membership