In part (a)) of the question, the variable cost of set up costs of the machine after deducting the attributable fixed cost was divided by 400 batches instead of the current batches of 500. I think it should be divided by 500 and then multiplied by 400. Is it a mistake in the book?
I do have some difficulty with other part of the question as well but let's focus on solving this one first.
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PMDifficulty in question no 154 robber pg 41 bpp kit
6y ago#1No - it is not a mistake (and the BPP answer is a reprint of the examiners own answer).
If they make batches of only 400 instead of the current 500, then they will need to make more batches, so more set-ups, and therefore higher cost.
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