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High low method complicated

This topic has 1 reply, 2 voices, and was last updated 9 years ago by HazE.

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November 12, 2015 at 7:08 am #281874
mumbaikar
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Hi sir John. I have a problem regarding step up cost in high low method questions. Please help me through this question.
Production units: 1200-900-1400
Total costs : 66600-58200-68200
The variable cost per unit is constant up to level of 2000 units but step up of 6000$ in monthly fixed cost occurs when production reaches 1100 units per month.
What is the total costs for the month when 1000 units are produced?
November 12, 2015 at 9:17 am #281911
HazE
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- Topics: 11
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Total cost for the month when 1000 units are produced will be 59000
51000 in fixed costs + variable cost of 8 per unit (1000*8=8000)
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