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Sir, the 4th note….what i understood was, the variable cost has to be divided by 500 and multiplied by 400…why is the answer in the other way sir? and also sir, why is the 4000 and 6000 of fixed costs included?
The number of setups are increasing effectively
They are going from 160 [80000 units / 500] to 200 as (80,000/400)
So this will cost more
22k after fix costs to 27.5k and so onIn the answer it states you can include or exclude the fix o/h
Sir, so the variable cost has to increase by new batch size of 1.25 (500/400)?
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