5,000 of the increase in the total cost is due to the step-up in fixed costs, so only the rest of the difference is due to variable costs. You can find the workings by clicking on ‘review quiz’ after submitting your answers.

The fixed cost must be the same at each level, and therefore the only difference between the total cost of 22,000 units and the total cost of 20,000 units must be the extra variable cost f the extra 2,000 units.

darshan.69 says

question second.

the variable cost (170000 – 135000)/(22000 – 16000)

is 5.83 ig

considering that the i got 163320 as my answer

John Moffat says

5,000 of the increase in the total cost is due to the step-up in fixed costs, so only the rest of the difference is due to variable costs.

You can find the workings by clicking on ‘review quiz’ after submitting your answers.

darshan.69 says

thank you for your assistance

got that.

John Moffat says

You are welcome 🙂

babylyn says

How was the total cost for 22000 units derived after find the variable cost per unit which is $5

For Q3

John Moffat says

The fixed cost must be the same at each level, and therefore the only difference between the total cost of 22,000 units and the total cost of 20,000 units must be the extra variable cost f the extra 2,000 units.