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Dear sir ,
how to calculate contribution and profit when there is a semi variable cost and a step fixed cost ..
I went through the book but did understand so please help me out ”
Thank youYou need to use the high-low model to separate out the fixed costs and variable costs.
The contribution is the revenue less the variable costs. The profit is the contribution less the fixed costs.
The high-low method is revision from Paper F2. I revise it in the course of my F5 lectures (the lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well).
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