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The following data relates to a company’s overhead cost.
Time Output Overhead Price index
(units) cost ($)2 years ago 1,000 3,700 121
Current year 3,000 13,000 155Using the high low technique, what is the variable cost per unit (to the nearest $0.01) expressed in
current year prices?
A $3.22
B $4.13
C $4.65
D $5.06plz help me with this thx
First you need to change the 2 years ago prices to the current prices using the index numbers provided (as I explain in my free lectures on index numbers).
Then you can use the high-low technique in the normal way, as again I explain in my free lectures.
Have you actually watched my free lectures for Paper MA? There is no point at all in attempting questions in your Revision Kit unit you have finished studying all of the topics 🙂
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