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high low method

Jjosy8712y ago
sorry Sir It's me again. I have my Cbe in less than 1 week and fell like not ready. another question please: You are going through the cost information of one of the production facility of the company which is as follows: Machine hours Total cost 32,000 515,000 35,000 530,600 41,000 570,000 Variable cost per unit remains unchanged from activity level of 30,000 -40,000 and then from 40,001 to 45,000. What is the total cost if machine runs for 42,500 hours provided: -the fixed cost steps up by 10% if machine hours exceed 36,000 hours -the fixed cost steps down by 10% if machine hours exceed 36,000 hours
John MoffatJohn MoffatTutor12y ago#1
I do not know where you found this question, but as it reads it is not possible. Either you have mistyped one of the two higher activity levels/costs; or the wording of the English in the question is appalling; or it is simply impossible.
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