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hello sir, how can I deal with the semi-variable overheads with partly fixed overheads, which will have an additional step-up overheads when the production reach a certain level? The question requires flexible overheads when the production level has reach the level that rise the overheads.
If there is a step-up in fixed overheads that part of the change in the total overheads will be because of the step-up. So subtract the amount of the step-up from the total change. The remained will be the change in the variable overheads so divide it by the change in the number of units as normal to get the variable cost per unit.
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