Cost and revenue question help

lana265
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

Comments

  • Nie
    Nie Registered Posts: 12 Regular contributor ⭐ ? ⭐
    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)
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