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TYPES OF COST AND COST BEHAVIOUR

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › TYPES OF COST AND COST BEHAVIOUR

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.
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    Posts
  • December 4, 2015 at 9:04 am #287460
    jaswinderkaur722
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    The following data relate to two output levels of a department.

    Machine hours. 17000. 18500
    Overheads. $246500. $251750

    What is the amount of fixed overheads?

    Sir could u help me solve this questn

    December 4, 2015 at 1:54 pm #287526
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    Have you watched the free lectures covering the high-low method? (Because I certainly cannot type out the lecture again here!!)

    (Our lectures are a complete course covering everything you need to be able to pass Paper F2 well.)

    The variable cost per unit = (251750 – 246500) / (18500 – 17000).

    When you know the variable cost per unit, you can then take either of the two output levels, calculate the total variable cost, and the rest of the cost is then the fixed cost.

    Again, you really must either watch the lectures (or if you don’t want to then study from a Study Text – there is not much point in attempting questions until you have studied the topics.)

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