Semi-variable, Fixed cost Level 4

jmh · December 2017

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 · January 2018

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

jmh · January 2018

thank you.

Semi-variable, Fixed cost Level 4

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