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High low method complicated

Forums › ACCA Forums › ACCA MA Management Accounting Forums › High low method complicated

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by HazE.
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  • November 12, 2015 at 7:08 am #281874
    mumbaikar
    Member
    • Topics: 49
    • Replies: 40
    • ☆☆

    Hi sir John. I have a problem regarding step up cost in high low method questions. Please help me through this question.

    Production units: 1200-900-1400
    Total costs : 66600-58200-68200

    The variable cost per unit is constant up to level of 2000 units but step up of 6000$ in monthly fixed cost occurs when production reaches 1100 units per month.
    What is the total costs for the month when 1000 units are produced?

    November 12, 2015 at 9:17 am #281911
    HazE
    Participant
    • Topics: 11
    • Replies: 84
    • ☆☆

    Total cost for the month when 1000 units are produced will be 59000
    51000 in fixed costs + variable cost of 8 per unit (1000*8=8000)

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