LEVEL4 AQ2016 MCDL High-Low Method. Variable and Fixed Overheards

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Becxo
Becxo Registered Posts: 30
edited January 2018 in Management Accounting: Decisions and Control
Hi,
I'm studying Level 4 AQ2016.

I've attached an example of a question from practice assessment 1 for Management accounting: Decision and control.
I've shown a snippet of the question and my workings to show how i understand how to arrive at the correct answer.

When sitting my live assessments, on two occasions i have had a question which looks just like this one, except with three production volumes.
I'm asked to calculate the answers for all three production levels but cannot find an example anywhere online or in books on how to deal with this having three production levels and not two.

Do i still use the High-Low method for three units of production?

Any help is greatly appreciated, or similarly any tips for passing this exam as i have just failed it for the third time.

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  • Vader
    Vader Registered Posts: 15
    edited January 2018
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    Hi,

    I'm taking the MDCL pretty soon for the first time. I'm not sure if I understand the 3 production part correctly, but wouldn't you just calculate the variable cost the same way but using the highest level of output and lowest level of output out of the units provided.

    From there just fill in the table the same way for all units of production for Fixed and Variable costs.

    Good luck with your exam!
  • Becxo
    Becxo Registered Posts: 30
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    Hi Vader,

    That would make perfect logical sense! I think i have tried to over complicate it!
    I will use that on my next attempt should it come up again and hope for the best

    Thank you very much for your help

    Good luck with your exam too!

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