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Hello,
In chapter 2 example 2 – variable cost.
In the question if the highest output is 20,000 units = $340,000 and the lowest is 10,000 units = $220,000
Can you explain why you have the cost per unit as $1.20/unit. I got $12/unit.
In said question, there is an increase in production where any production rises over 30,000 units will attracted a 50% increase in fixed cost.
You have $220,000 – ($1.2 x $10,000)= $100,000 which is confusing because if the cost per unit is correct therefore the answer will be for the fixed cost should be $208,000
If I uses the $12 per unit then the answer will be $220,000 – ($12 x $10,000) = $100,000
Please clarify?
Hi
I noticed that too $12 is the correct cost per unit.
They typed the wrong cost per unit but used the rest of the figures as if they had put in the correct cost of $12 per unitThere were a few problems with FA2 as well and I highlighted them and the notes were reissued.
If we all highlight the errors, the correct ones will be reissued for those coming after us but it does make the studying a little bit more difficult as you question yourself when you get a different answer & spend longer on it than you need to trying to figure out if it’s you or the notes.
Then on the part of the example for costs at output
25,000 & 35,000 they have used $1.20 instead of $12Answer should be
25,000: 100,000 + $12 x 25,000 = 400,000
35,000: 150,000 + $12 x 35,000 = 570,000Can any one else agree that this is correct?
Are you referring to MA2 course notes on opentution provided “MA2 course notes” or the BPP or Kaplan books?
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