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    Hello,

    Please see the images attached. Name:  20150917_111321.jpg
Views: 107
Size:  141.4 KBAttachment 462209462211

    1. How was the sales revenue calculated
    2. The fixed cost was worked out as £2500 but in the table is it £3500, why?
    3. What's the difference between fixed element and fixed cost.
    4. How was the profit per batch calculated?


    Note: fixed cost and variable cost were correctly calculated using the high low method.

    Thanks in advance
    Jabed
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    Probably already solved this but just to help anyone else.

    1) The sales revenue for the next two questions worked out by the following £25,000 / 1000 units to get the price they're selling the units at (£25). They then did £25 x 1,500units for the second column and £25 x 2,000 units for the final one.
    2) You seem to be getting a bit confused there are four different types of costs, Variable, Fixed, Semi-Variable and Stepped. The semi- variable's fixed portion is £2,500 however the £3,500 is a completely different cost which is a fixed one, they're not related at all.
    3)A fixed cost is a different type of costing so in this question the fixed cost is £3,500 an example of this would be paying for your rent on a property is a fixed cost as it remains the same no matter how many units you produce. A fixed element is a part of your semi-variable which is made up of a variable portion and fixed portion.
    4)The profit per batch was calculated by taking your profit which was £6,000 and dividing it by the number of units produced which were 1,000 (6000/1000=6). The profit was calculated in the beginning by taking your sales revenue and taking away your total cost.

    Kinda late but oh wells.
 
 
 
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