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Chapter 4

$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

————

Illustrations and further practice

Now try TYU question 7 from Chapter 4

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