Cost Classifications

sophie_612

Hi,

can anybody have a look at the attached question and explain to me how they got these answers as I'm a little confused.

Thanks
Sophie

dumutroba

What I usually do

dumutroba

That is just classification
For the calculation
1 is obviously 60000 because its fixed
2 is 6000x9
3 is 30000
4 you have to use high low method

Good luck

Amna

hi sphie how you calculated sami variable cost
high low method 8000*11.50=92000- 2000*16= 32000 = 60000/6000=10 per unit
I am stuck could anyone explain me please

Hannah9210

Amna- the calculation you have done has worked out the variable per unit. You would then need to carry this calculation on to find your fixed cost.

Total cost for high - variable cost (92000- 10 x 8000) =12000

So 12000 will be your fixed cost and 10 x 6000 will be your variable cost.

=72000

Hope that makes sense!

Amna

thanks sophie