operating report-semi-variable cost

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isephiri
isephiri Registered Posts: 6
in Management Accounting: Budgeting
GOO DAY
I have a situation here..Please help me how to calculate semi variable cost given a note that Energy cost is semi variable .The fixed element is budgeted at GBP 12,800 per month. Original budget sale volume is 178,000 units and Actual volume is 192,000.
Calculate the flexed budget where Original budget is GBP 60,860 and Actual is GBP 65,080.

I have tried high and low method but it does not work ..please help with another formula or workings.
with regard

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  • PeterC
    PeterC Registered, Tutor Posts: 245 Dedicated contributor 🦉
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    This scenario does not require high-low, all it requires is:
    Total cost = fixed cost + total variable cost
    So,
    for the budget of 178,000 units
    Total variable cost = Total cost - fixed cost = £60,860 - £12,800 = £48,060
    Variable cost per unit = Total variable cost/Number of units = £48,060/178,000 = £0.27

    For the flexed budget of 192,000 units
    Total cost = fixed cost + total variable cost = £12,800 + (£0.27 x 192,000) = £64,640

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