The following question is taken from the December 2011 exam paper. The following shows the total overhead costs for given levels of a company's total output. Cost Output $ Units 4,000 1,000 7,000 2,000 10,000 3,000 9,500 4,000
A、step up in fixed costs of $500 occurs at an output level of 3,500 units. What would be the variable overhead cost per unit (to the nearest $0.01) using the high-low technique?
A、$1.67per unit
B、$1.87per unit
C、$2.75per unit
D、$3.00 per unit
A、step up in fixed costs of $500 occurs at an output level of 3,500 units. What would be the variable overhead cost per unit (to the nearest $0.01) using the high-low technique?
A、$1.67per unit
B、$1.87per unit
C、$2.75per unit
D、$3.00 per unit
【参考答案及解析】
ACCA examining team comments This question relates to study guide reference A3(h). The high-low technique estimates variable cost per unit by looking at the change in costs between the highest and lowest levels of output. The correct answer is A. This can be calculated by finding the change in cost between the highest and lowest output levels not explained by the step in fixed costs ($9,500 - $4,000 - $500 = $5,000) , and dividing by the change in output between the highest and lowest output levels. ($5,000 / (4,000 units - 1,000 units) = $1.67 per unit. Many candidates incorrectly based their calculations on the change in costs between the highest and lowest levels of cost, and hence selected option D (($10,000 - $4,000)/ (3,000 units -1,000 units) or C (($10,000 - $4,000 - $500)/ (3,000 units - 1,000 units). This mistake suggests some confusion between the independent variable, output, and the dependent variable, cost.
ACCA examining team comments This question relates to study guide reference A3(h). The high-low technique estimates variable cost per unit by looking at the change in costs between the highest and lowest levels of output. The correct answer is A. This can be calculated by finding the change in cost between the highest and lowest output levels not explained by the step in fixed costs ($9,500 - $4,000 - $500 = $5,000) , and dividing by the change in output between the highest and lowest output levels. ($5,000 / (4,000 units - 1,000 units) = $1.67 per unit. Many candidates incorrectly based their calculations on the change in costs between the highest and lowest levels of cost, and hence selected option D (($10,000 - $4,000)/ (3,000 units -1,000 units) or C (($10,000 - $4,000 - $500)/ (3,000 units - 1,000 units). This mistake suggests some confusion between the independent variable, output, and the dependent variable, cost.