Semi-variable, Fixed cost Level 4

jmh

I am working on the flex budget question 6.1 from Osborne book (tutorial) and I am struggling to understand how they came to the 94000 for the electricity.

The question is energy: Original budget - 79000
Actual budget - 85000
The budget for energy is semi variable. The fixed element is 4000

What I did is the following: 79000 - 4000 = 75000, 75000/50000 = 1.5 per unit then I did the 1.5 x 60000 = 90000
Do I need to then add the 4000 to the 90000 as the 90000 is only the semi variable

Thank you for help

jemholmes

You just have to add back the fixed element like you said as you've only worked out the semi-variable amount

jmh

thank you.