Please help with assessment 2 task 5c on the energy calculations

I'm having trouble calculating energy, i hope the question is clear

Answers

  • katiehares
    katiehares Registered Posts: 1
    You will need to use the high low method using the figures from the first and second draft.
    That way you can work out your fixed and variable cost per unit, then apply it to the number of units for the third draft.
    Fifi10
  • Fifi10
    Fifi10 Registered Posts: 3
    I'm stuck again can you please work it out
  • NataliaBobrova
    NataliaBobrova Registered Posts: 2
    Hi,

    The energy cost is a semi-variable. You have to work out fixed and variable elements of the cost using the information from the first and second drafts. You have to use high/low method for your calculations. Hope that helps!
  • Fifi10
    Fifi10 Registered Posts: 3
    Can someone please work out the question because I tried doing what you said and I'm getting a different answer, i need workings
  • Pian32
    Pian32 MAAT Posts: 464
    High - Low

    (Cost high - Cost Low)/(Number high - Number low) = Variable cost

    (33250-31450)/ (250000-210000) = 1800/40000 = 0.045

    Total cost = Variable + fixed

    @250,000 units

    33250 = 0.045*250000 + Fixed

    Fixed = 33250-11250 =£22,000

    Check with 210,000

    22,000 + 0.045*210000 = 31450

    Third Draft

    Cost = 22,000 + 0.045*225000 = 32,125

    Alternative method (Not high/low)

    (225,000-210,000)/(250000-210,000) = 0.375 = Amount along line as decimal

    Cost = 31450 + ((33250-31450)*0.375) = 31450 +675 = 32,125

    The second method can save time but I wouldn't use it unless you understand it. It takes the same assumption as the high/low method and applies it differently.
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F5- Passed Dec 2020
    F6- Passed Sep 2020
    F7- Passed June 2021
    F8 - Passed Sep 2021
    F9 - Passed June 2021

    SBL
    SBR
    ATX - Planned Dec 21
    APM -
Privacy Policy