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Total cost of 360000 units. Dollar 380000
Total cost of 24000 units dollar 320000
There variable cost of 12000 units equal to 60000
Sir I can’t understand how these variables cost of 120000 units is found by subtracting 380000 with 320000 what is the reason behind thisThe only reason for the total coast changing is because of the extra variable cost of the extra units. The rest of the cost is a fixed cost which by definition is the same at both levels.
I explain this, with examples in my free lectures working through Chapter 4 of our free lecture notes.
The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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