Hello Sir,
Do guide us that how can we calculate stepped fixed cost ?
Thanks
Ask the Tutor ACCA MA
stepped fixed cost
You use the high low method in the normal way, but if one of the levels is over the limit for the step-up in the fixed cost then the difference in the total costs is partly due to the step-up. So subtract the extra fixed cost from the difference - the remainder is the extra variable cost of the extra units. Then continue using the normal logic.
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