Cost and revenue question help
lana265
Registered Posts: 17 Dedicated contributor 🦉
Does anyone know how to work out the fixed element on the practice assessment 1, question 2.1 please?
Im trying to find the fixed element for 2 different unit amounts and I just cant seem to do it.
Thanks
Im trying to find the fixed element for 2 different unit amounts and I just cant seem to do it.
Thanks
0
Comments
-
You need to use the high-low method.
3000 batches = £7380
1200 batches = £3780
Calculate the difference between the two.
1800 batches = £3600
Divide 3600/1800 to find out what one batch with cost... 1 batch = £2.
Put that £2 back into either of your original equations
3000 * £2 + fixed cost = £7380
fixed cost = 7380-6000= £1380
If you've done your maths right then your numbers will work in the other equation as well (1200 * £2 + 1380 = £3780)0
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