Semi Variable Costing

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Registered Posts: 18 Dedicated contributor 🦉
Got a question on practice CBT 3 2.2

Cant figure out the semi variable cost

Energy in July budget 114625
Budgeted sales revenue in units 27500

Actual energy 114250
Actual units sold 26000

How do i work out the answer that is given which is 113500?

Thanks,

Jake

• Registered Posts: 283
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I have just looked at this for you. You have left out one vital piece of information. The fixed element is £94,000 per month.
Therefore, 114625 - 94000 = 20625
20625/27500 = 0.75
0.75 x 26000 = 19500
19500 + 94000 = 113500
hope this helps
• Registered Posts: 18 Dedicated contributor 🦉
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Thanks I am also struggling with the stepped costs on the same question. Am i right in saying i divide 27500 units by 9000 which is each step to get 4 steps.

I then do 60000 divide by 4 to give 15000.

Then i do 26000 divide by 9000 to get 3 steps...

15000 x 3 steps = 45000.

I know the answer is right, is this the way to do it correctly?

Thanks