Identify the nature of costs and segregate mixed cost into fixed and variable components.

Here's the solution to your management accounting problem. a) Identify the nature of costs | Details | Level of Activity (20,000 units) | Level of Activity (30,000 units) | Nature of Cost | | :---------------------- | :------------------------------- | :------------------------------- | :------------- | | Direct materials | Rs. 60,000 | Rs. 90,000 | Variable cost | | Direct labour | Rs. 40,000 | Rs. 60,000 | Variable cost | | Supervision | Rs. 35,000 | Rs. 50,000 | Mixed cost | | Repair and maintenance | Rs. 30,000 | Rs. 40,000 | Mixed cost | | Depreciation | Rs. 25,000 | Rs. 25,000 | Fixed cost | | Salary | Rs. 50,000 | Rs. 50,000 | Fixed cost | b) Segregate mixed cost into fixed and variable components We will use the high-low method for segregation. i. Supervision Step 1: Calculate Variable Cost Per Unit (VCPU) VCPU = Cost at high activity - Cost at low activityHigh activity level - Low activity level VCPU = Rs. 50,000 - Rs. 35,00030,000 units - 20,000 units VCPU = Rs. 15,00010,000 units VCPU = Rs. 1.5 per unit Step 2: Calculate Fixed Cost Using the high activity level: Fixed Cost = Total Cost at high activity - (VCPU × High activity level) Fixed Cost = Rs. 50,000 - (Rs. 1.5 per unit × 30,000 units) Fixed Cost = Rs. 50,000 - Rs. 45,000 Fixed Cost = Rs. 5,000 ii. Repair and Maintenance Step 1: Calculate Variable Cost Per Unit (VCPU) VCPU = Cost at high activity - Cost at low activityHigh activity level - Low activity level VCPU = Rs. 40,000 - Rs. 30,00030,000 units - 20,000 units VCPU = Rs. 10,00010,000 units VCPU = Rs. 1.0 per unit Step 2: Calculate Fixed Cost Using the high activity level: Fixed Cost = Total Cost at high activity - (VCPU × High activity level) Fixed Cost = Rs. 40,000 - (Rs. 1.0 per unit × 30,000 units) Fixed Cost = Rs. 40,000 - Rs. 30,000 Fixed Cost = Rs. 10,000 Send me the next one 📸