Budgeting! Urgent Help please!
dnewton1989
Registered Posts: 5
Hello everyone,
I have my budgeting exam coming up on Wednesday and I am having huge trouble with Stepped costs on practice assessment 1 on the 2013 practice papers task 1.6.
It says depreciation is a stepped cost increasing every 10,000 units but I do not have a clue what I am even trying to calculate with this!
Any help would be much appreciated!
Thanks
Danny
I have my budgeting exam coming up on Wednesday and I am having huge trouble with Stepped costs on practice assessment 1 on the 2013 practice papers task 1.6.
It says depreciation is a stepped cost increasing every 10,000 units but I do not have a clue what I am even trying to calculate with this!
Any help would be much appreciated!
Thanks
Danny
0
Comments

Hi,
1) In the original draft, depreciation is £8100. And it is given that it increases at every 10000 qty levels. Therefore, depreciation cost per 10000 units has to be £900 (8100/9).
2) Sales volume in the Alternative Scenario is projected at 75600 units (10% less than 84000). Therefore, depreciation cost will be £900 x 8 = £7200.
Trust, this helps.
Thanks0 
@LearningAcademy where did you get 9 from? Thank you0

Because it has taken 9 "steps", if the depreciation was £8000 it would of been 8 eight steps, but the £100 requires another step.0
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