1.1 B question sample assesment 1 Management Accounting: Decisions and Control

AgnesAgnes Registered Posts: 7
How to calculate task 1.1 B fixed and variable overheads for the following productions level ? Any help?




Comments

  • IrrorateIrrorate Registered Posts: 140
    Complete a high-low to get the variable, plug it back in for the fixed then take into account the amendments underneath the table.

    23900u - £324400
    19000u - £295000
    4900u - £29400
    1u - £6 variable
    fixed costs: £181k

    @ 21000u FC £181k VC £126k
    @ 36000u FC £193k (£181k + £12k) VC £205k (25000 @ £6, 11000 @ £5)
    Agnes
  • AgnesAgnes Registered Posts: 7
    Thank you very much.
  • molly_molly_ Registered Posts: 4
    How do you get the fixed costs of £181,000?

  • CornishPixieCornishPixie Registered, MAAT, AATQB, AAT Licensed Accountant Posts: 27
    If each unit has a variable cost of £6 then 23900 units will have variable costs of £143,400 Take this cost away from the full cost for 23900 units (£324,400 - £143,400) will give you £181,000 for the fixed costs. The same works for the 19000 units (19000 x 6 = £114,000). The full cost for 19000 units is £295,000 less the variable costs £114,000 = £181,000.

    Hope that helps.
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