Page 81 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 81
Cost classification
Calculate the variable cost per unit:
Change in cost
Variable cost = ––––––––––––––––––
Change in activity level
$47,200 – $35,700
So, variable cost = –––––––––––––––––– = $2.30
14,000 – 9,000
Substituting this back in to the data for Quarter 3, we can calculate the fixed
cost:
$
Total cost 35,700
Variable cost (9,000 units × $2.30) 20,700
————
Therefore, fixed cost $15,000
————
The total cost at different activity levels can then be estimated:
Total cost = total fixed cost + total variable cost
Total cost for 11,000 units = $15,000 + ($2.30 × 11,000) = $40,300
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