Stepped Expenses

[deedee]

Are stepped expenses variable or fixed?<BR>I thought they are variable but I'm doing a flexed budget on a December 03 past paper, the note goes as follows:<BR><BR>For every £5000 spent on labour, you could produce upto 3000 Omegas:<BR>The actual production was 95000 Omegas. Therefore I calculated it as:<BR>95000/3000*5000 = 158333.3333333 - which can't be right as they always equal round numbers.<BR><BR>Am I doing something wrong or more to the point what am I doing wrong?????????

[EddyB]

I would have thought the budgeted amount would be 160000.<BR><BR>From what you have said they spend £5000 on labour which could produce UP TO 3000 units.<BR><BR>Therefore 95000/3000 = 31.66 lots of 3000 <BR><BR>What I am trying to say is that they can spend £5000 on labour but not necessarily produce the 3000 units that they are capable of. So, you would round up the 31.66 to 32<BR><BR>32 x 5000 = 160000<BR><BR>Not sure that this is the correct way of laying it out but I am sure someone else will correct if I am wrong

[deedee]

EddyB<BR><BR>I see your logic, it now makes sense.<BR><BR>Thankyou

[sjcjd]

Hi,<BR><BR>I had same idea as deedee, many thanks for that answer, iv got college tomorrow night and that paper was homework. Im really struggling with this year, so how smart will i look! <BR><BR>i had rounded down to 158. (will be 160 by 6pm tomo tho!) <BR><BR>Thanks again.<BR><BR>sj