Q.The management accountant of a business has identified the following information:
Activity level 800 units 1200 units
Total cost $16400 $23600
The fixed costs of the business step up by 40% at 900 units.
a) What is VC per unit?
b) what is FC at 1100 units?
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PMBudgeting
A. VC per unit:
(23,600-16,400)/(1,200-800)=$18/unit
B. FC at 1100 units
$18=1 unit--->900unit=$16,200
==> FC at 900 = 40%*16,200=6,480
==> FC at 1100 unit = (6,480*11,00)/900=$7,920
Thank you Josy87 i got it now. If you think it can be solved through H+L, can you please let me know how to do it?
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