This question consists of two independent parts, A and B. Part A Sakhumizi (Pty) Ltd is...

 

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This question consists of two independent parts, A and B. Part A Sakhumizi (Pty) Ltd is a research and development company that produces and packages African medicine. The key ingredients used in the African medicine manufacturing process are herbs, water and various preservatives and acidifiers. The newly appointed management accountant was asked to estimate the company's electricity cost behaviour. The following monthly electricity costs have been incurred during the last quarter: Month January February March Litres of African medicine produced 21 000 41 000 39 000 Electricity costs R22 100 R24 100 R24 950 Required: Marks Calculate both fixed and variable cost components of the electricity [3] costs using the high-low method. b) Compare and contrast the high-low and scatter-graph methods of [2] estimating cost behaviour. This question consists of two independent parts, A and B. Part A Sakhumizi (Pty) Ltd is a research and development company that produces and packages African medicine. The key ingredients used in the African medicine manufacturing process are herbs, water and various preservatives and acidifiers. The newly appointed management accountant was asked to estimate the company's electricity cost behaviour. The following monthly electricity costs have been incurred during the last quarter: Month January February March Litres of African medicine produced 21 000 41 000 39 000 Electricity costs R22 100 R24 100 R24 950 Required: Marks Calculate both fixed and variable cost components of the electricity [3] costs using the high-low method. b) Compare and contrast the high-low and scatter-graph methods of [2] estimating cost behaviour.

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