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hi again,
… revision bpp at problem 16 ABC plc, at high-low method i found that 2000 is gone out. but where have to be the difference? for W for example 6000 unit at 1£ variable cost remain other 2000. where are lost? or because we need to calculate just the contribution we don’t care about that differnce. page 113
thank you very much guys …. who will have time again for me:)
The £2000 fixed cost would be avoided if the product was to be discontinued, and should be ignored in the calculation, the remaining overhead costs are to be apportioned to the products.
For W H/L = (14000-10000)/(10000-6000) = $1
thank you … anyway i am little dissapointed with bpp …. are some errors that sometimes i feel like …: page 220 mat yield variance F, and at alternative method the same variance is A … and not just here, i’ve found some controversial points at other few problems. Just in my book is … or: it’s right?!
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