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Sir ,its from a bpp kit question,no .33
In the notes at point 4 it says,
Whilest both components are currently made in batches of 500,this would need to change,with immediate effect,to batches of 400.
In the answer section they multiply the variable set up cost by 500/400!! How this come??(This is a repeatition of my previous question)I think you are using an older edition of the revision kit, because question 33 in the current edition does not have any of the figures you mention.
If you mean a question called Robber, then the reason is that they are changing the size of the batches from 500 to 400.
So, just supposed they were making 2,000 units. Currently that would mean 4 batches.
However in future it will mean making 5 batches.So since the cost varies with the number of batches, it will mean that making 5 batches will cost more than making 4 batches. The cost of 5 will be 5/4 times the cost of making 4.
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