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Quantitative Analysis in budgeting

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Quantitative Analysis in budgeting

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by AvatarJohn Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • August 26, 2017 at 2:59 pm #403666
    Avatariyamu
    Participant
    • Topics: 286
    • Replies: 171
    • ☆☆☆

    The management accountant of a business has identified the following information;

    Activity level 800 units 1200 units

    Total costs $16,400 $23,600

    The fixed costs of the business step up by 40% at 900 units
    What is the variable cost per unit.

    The kit calculated $8

    This is not because i did not understand the process but if there is any other short way in case it is objective questions.

    Using the liner model, TC= FC + VC

    23,600 = 1.4FC + 1200 VC AND 16,400 = FC + 800VC

    23,600- 1200VC = 1.4FC 16.400 – 800VC = FC

    23,600 -1200vc/ 1.4 = FC

    Using Substitution ,
    16400 – 800vc = 23600- 1200vc/1.4
    22960- 1120vc= 23,600 – 1200vc
    23,600- 22960= 1200-1120
    640= 80vc
    vc = 640/80 = $8.

    Please, assist if there is any shorter way to calculate this.

    Thanks.

    August 26, 2017 at 5:10 pm #403683
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54838
    • ☆☆☆☆☆

    I can’t think of a shorter way 🙂

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    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘Quantitative Analysis in budgeting’ is closed to new replies.

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