Please Sir help,
A B C D
total cost 214,559 239,970 243,183 259,541
Output 64,200 79,350 86,170 85,620
uses high low method to establish a function y=a+bx
I used high 86,170 but the right answer is with high output 85, 620. I’m confused, I thought we should consider output not cost.
You are correct – we use the highest and lowest levels of activity (i.e. the output in this case).
(I hope this is not one of my examples, because if it is then I need to correct it!!)
Well assuming that you have typed it correctly, then they have made a mistake.
They are not perfect
You’re right Sir.
I have another problem.
Opening inventory X 5000kg $4
Opening inventory M 3000 units
we need 3kg of X to make one M. Sales of M 48 000 throughout the year.
closing inventory X : one month’s worth of production.
closing inventory M : two month’s worth of sales
production X 53000 units
Materials X required for production 159,000kg
What is the material X purchase budget?
Please start a new thread when it is a different topic.
Opening inventory of X is 5000 kg
Material required for production is 159,000 kg
Closing inventory is 159,000/12 = 13250 kg.
So purchases are 158000+13250-5000 kg.
The cost is $4 per kg.
Thanks Sir I got the same answer:
but the answer in the book is different that ‘s why i was confused.
96000/12 + 159000 – 5000 = 162000 kg
I struggled to get 96000 but it seems like it’s (48000*2 ). I don’t know why!!!
BPP Budgeting page 199
It is not correct – either there is a misprint in the question or in the answer.
I do not have the BPP books.
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