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    Question

    The following data relates to a semi-variable factory

    overhead: Using the High–Low Method, the fixed cost is:
    A ₹ 20,000 Correct Answer Incorrect Answer
    B ₹ 25,000 Correct Answer Incorrect Answer
    C ₹ 30,000 Correct Answer Incorrect Answer
    D ₹ 40,000 Correct Answer Incorrect Answer
    E ₹ 45,000 Correct Answer Incorrect Answer

    Solution

    Variable cost per unit = (55,000 − 34,000) ÷ (5,000 − 2,000) = 21,000 ÷ 3,000 = ₹ 7 per unit Fixed cost = Total cost − (Variable cost × Units) = 55,000 − (7 × 5,000) = 55,000 − 35,000 = ₹ 20,000

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