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MONTH……………UNITS…………OVERHEAD…………. INDEX
JAN………………….10………………….3352………………….100
FEB………………….10.5………………….3479………………….101
MAR………………….12………………….3860………………….102
APR………………….9………………….3098………………….104
MAY………………….9.5………………….3225 ………………….105
JUN………………….10.25………………….3416………………….106Q. Using high low analysis, what is the variable cost per unit in June’s prices?
Answer is {(3860 x 106/102) -(3098 x 106/104)} / (12-9) = 284
Please be kind enough to explain how’s this answer is getting in detail.
Thank YouPlease do not head up posts with simply ‘Ask Question’, but head it up with the name of the topic. (It is because many students use our search box in order to see if their problem has already been dealt with in previous posts).
You asked the same question on February 19. I answered on February 20 and you replied saying that you had now ‘got it’.
https://opentuition.com/topic/using-high-low-method-with-index/So why are you asking the question again?
What does 30% of purchases are by cash and the reminder paid three month after purchases mean
It means that if they make purchases of (say) $100 then they pay 30% i.e. $30 immediately in cash and the remaining $70 is on credit and so the cash is paid 3 months later.
This relates to the preparation of cash budgets.
Have you watched my free lectures on cash budgets where this is explained?
The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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