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

Agnes
Registered Posts:

**7**
How to calculate task 1.1 B fixed and variable overheads for the following productions level ? Any help?

Agnes
Registered Posts: **7**

## Comments

14023900u - £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)

7466Hope that helps.

79Please can someone explain this to me i've tried reading the other comments but it just doesn't make sense.

Thanks

Sophie

254we have to produce data for 21000 and 36000 units and the condition that is given affects only the 36000 units, so finding the variable and fixed cost for 21000 will be straight forward by using the high low method on the data already given for 19000 and 23900 units, the calculation is as follows:

23900-19000=4900units

324400-295000=£29400

29400/4900 =£6 VARIABLE COST PER UNIT

Therefore 19000units x £6=£114000 variable cost

To find fixed cost we will use the formula total cost-variable cost=fixed cost, or 295000-114000=181000 fixed cost

We will use the same data for the 36000 units, but we will need to take into account the conditions given

We are told that anything above 30000 units the fixed cost will increase by £12000, therefore for the 36000 units the fixed cost must be 1810006+12000=193000

For the variable cost anything above 25000 units will cost £1 less, so:

25000units x £6=150000

11000 units x £5 =55000

Total 36000 units £205000

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