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A company has been reviewing its total costs over the last few periods and has established the
Period 1,2,3
Sales units 225,150,350
Total cost
2300,1500,2800 respectivelyThe company is aware that fixed costs increase by £500 when sales exceed 200 units.
Ans 1620- Topics: 65
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Sir shouldn’t the ans be 2120
2800-1500-500/350-150= 4
Fc is 2800-(350×4)=1400
Total costs
180×4 +1400=2120
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Total cost at sales level of 180 units
The fixed cost that you have calculated of 1,400 is for levels above 200 units.
180 units is below 200 units and therefore the fixed cost is $500 lower and is only $900.
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Sir r if TC ay 200 units is asked then Fc would be 1500-(150×4) 900 since 500 increase only of sales exceed 200 units
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