high-low method

Prime costs are purely variable and this is borne out by the figures: 430,000/50,000 = 8.6; 473,000/55,000 = 8.6 Overheads will probably be semi-variable, so as units increase by 5,000, OH increase by 9,000. This implies 9000/5000 = 1.8/unit At 50,000 VC = 1.8 x 50,000 = 90,000, so FC = 330,000 - 90,000 = 240,000 [Check: at 55,000 VC = 1.8 x 55,000 = 99,000, so FC = 339,000 - 99,00 = 240,000] If budgeted production is 54,000, the fixed overhead absorption rate = 240,000/54,000 = 4.44 VC = 8.6 + 1.8 = 10.4 Total cost per unit = 10.4 +4.44 = 14.84

Thank you very much Sir.

The following forecasts relate to a single product business for the period: variable cost 38,640 fixed cost: 39,975 sales revenue: 84,000 sales units : 6,000 what sales revenue is required to achieve a profit of 12,000 in the period? (a) 74,030 (b) 90,615 (c) 96,250 (d) 112,990 please i need help and explanations on this to understand how it was calculated...... thank you.

Using the formula, Profit = Contribution Margin - Fixed Costs Rearranging it, CM = Profit + FC As, the fixed costs remain the same irrespective of the activity level, so we can simply apply various profit figures to calculate what the required CM will be for a particular profit figure. Required CM = 12,000 + 39,975 = 51,975 Now, if we divide this CM by CM/Sales %, we'll get Sales Revenue figure. I'm leaving it for you to calculate CM/Sales %. Sales Revenue = 51,975/54% = 96,250 (C)

thank you sir i understand it now

A company is preparing the budget for a product and the following data has been provide. planning sales(units); month 1: 2,000 month 2: 2,000 month 3: 2,500 month 4: 2,800 Closing inventory in each month be 40% of the next month's sales. Suppliers are paid in the in the month following purchase. the standard cost of material is $4 per unit. what is the budgeted payment to suppliers in month 3? please i need help...... thank you.

Payments to suppliers in Month-3 will be for the purchases made in Month-2. Of the 2,000 sales, 40% will be purchased in Month 1 as the closing inventory. So, the remaining 60% will be purchased in Month-2. The closing inventory for month-2 will be the 40% of sales of month-3, also purchased in month-2. Month-2 Purchases: 2,000 x 60% = 1,200 2,500 x 40% = 1,000 Total Purchases = 2,200 Cost = 2,200 x $4 = $8,800 (paid in month-3)

thank you very much

Average usage of a raw material is 200kg per day, the average ordering lead time is five days, the reorder level is 1600kg and the reorder quantity is 2000kg. what is the average raw material inventory? a) 800kg b)1400kg c)1700kg d)2000kg please help......

Anybody please EOQ, could you help please. ...?

Use the formula: Average Inventory = Safety Inventory + EOQ/2 EOQ is given. To calculate Safety Inventory, use the formula. Minimum Inventory = ROL - (Avg. Usage x Avg. Lead Time)