MDCL assessment 2 task 9 c

Does anyone know how to calculate the last two items in box c. Expected variable manufacturing cost per unit and target fixed cost per unit please ? I’ve got the total target cost of £12.75 but just have a mental block on the how it’s split between the two costs !

Comments

  • ncraggsncraggs Just Joined Posts: 70Registered, Tutor
    In task 9, the variable cost is taken right from the top. You have variable costs of £140,000 for 20,000 units, so this is £7 per unit.

    So if you need profit of 25% or £4.25. You have £12.75 to spend on costs. If £7 are variable the rest must be what you have per unit for fixed costs.

    So if you have £5.75 per unit for fixed costs, and you have fixed costs of £145,000. You need to sell £145,000/£5.75 = 25217 units.
    AAT Distance Learning Director First Intuition www.fi.co.uk
  • Lulu21Lulu21 Posts: 4Registered
    You’re a star ! Thank you
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