Answered: Calculate the change in activity using…

Calculate the change in activity using the information given below. Description Low High Volume (units) 105,000 185,000 Electricity cost (AED) 75,000 115,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

Calculate the change in activity using the information given below.

Description Low High Volume (units)

105,000 185,000

Electricity cost (AED) 75,000 115,000

Variance in cost is AED40,000 and in units is 80,000

Variable cost per unit is AED0.5 => Variable Cost = Change in cost

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