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6. Fagesi Ltd incurred the costs as indicate below. During the six months ended 30 Dec, these costs changed, but not in direct relation to
6. Fagesi Ltd incurred the costs as indicate below. During the six months ended 30 Dec, these costs changed, but not in direct relation to the volume.
MONTH | NUMBER OF UNITS PRODUCED | HISTORICAL COST |
JULY | 980 | P19 800 |
AUGUST | 1000 | P20 000 |
SEPT | 1050 | P20 500 |
OCT | 950 | P19 500 |
NOV | 1040 | P20 400 |
DEC | 1060 | P20 600 |
Required:
a) Use high-low method to determine the variable cost per unit and the total fixed costs (7marks)
b) Forecast on the total cost if an estimated 1 100 units are to be manufactured in January the following year (3marks)
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