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Sir, please help me to solve question below:
1) A van delivered wood to two firms in a week.
Firm P – 200 kg delivered ; distance travelled 250 kilometre
Q – 500 kg delivered ; distance travelled 800 kilometreThe van costs $675,000 to operate for the week. Each delivery was carried separately and there were no other deliveries during the week.
What is the cost per kilometres of wood delivered in a week (to the nearest $0.01)?
2) This year, the output is 5,000 units and overhead cost is $31,000. three years ago, output was 2,000 unit and the overhead cost was $8,800.
The price index was 132 three years ago and is 164 this years.Using the high-low technique, what is the variable cost per unit (to the nearest $0.01). Expressed in current year prices?
1) Total kg/km – (200 x 250) + (500 x 800) = 450,000.
Cost per kg/km = $675,000 / 450,000 = $1.502) In current year prices, the cost 3 years ago would be 8,800 x 164/132 = 10,933
So now you can use the normal high low technique – it is now really easy.
Low: 2,000 units cost $10,933
High: 5,000 units cost $31,000
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