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could anyone help me know how question 5 is to be done in the mock paper?answer=$6.69
If you mean the mock exam on our website then you need to copy and paste the question in order to get an answer.
The reason is (as is stated on the introductory page before the test), the questions are taken at random from a large bank of questions. Every time you take the test you are likely to get different questions, and so ‘question 5’ is different every time.
this year the output is 5000 units and overhead cost is $31,000.
three years ago the output was 2000 units and overhead costs was $8,800.
the price index was 132 three years ago and is 164 this year.using the high low technique, calculate the variable cost per unit(to the nearest $0.01) expressed in current year prices?
First you need to restate the cost 3 years ago in current prices:
8,800 x 164/132 = $10,933
Now you can use the normal high-low approach. So the variable cost per unit = (31,000 – 10,933) / (5,000 – 2,000) = $6.69
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