Page 94 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 94
Chapter 4
Test your understanding 11
B
X is clearly a fixed cost as it does not change over the different activity levels.
For W, Y and Z it is not so clear so calculate the cost per unit at each activity
level
Cost type Cost per unit @ 100 units Cost per unit @ 140 units
$ $
W 8,000/100 = 80.00 10560/140 = 75.43
Y 6,500/100 = 65.00 9,100/140 = 65.00
Z 6,700/100 = 67.00 8,580/140 = 61.29
The unit cost of Y is constant which suggests that Y is a variable cost
The total cost and the cost per unit of W and Z very at the different levels
which suggests that W and Z are semi-variable costs
Test your understanding 12
B
Variable cost per unit = $(25,000-23,200)/(2,500-1,600) = $2
Total fixed costs = $25,000 – (2,500 × 2) = $20,000
Forecast for 2,700 units = $20,000 + (2,700 × $2) = $25,400
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