6 thoughts on “Fixed and Variable Costs – 2

  1. Dear J, I think getting an idea like this will take time in the exam. How to improve on understanding them and implement them. I am sure that this way saves a lot of time than solving through equations but getting the idea and having clarity is very important. I think being lazy ( sans pen) while solving questions can help us get ideas like this. Cheers!!

    • Getting such ideas will get time in the exam….if you are trying to find such ideas for the first time on the day of the exam 🙂 However, if you make it a part of your daily practice to look for such methods, you would be surprised at what can be accomplished…


  2. An institute’s total expense on students for a particular course is partly fixed and partly varies linearly with the number of students. The Av. expense per student is 615 when there are 24 students and 465 when when there are 40 students. What is the average expense when there are 60 students.

    • Firstly recognise that CAT will ensure solvability first and foremost. Having said which, the equations method is fairly easy here – 615 x 24 = 14760 and 465 x 40 = 18600 so extra 16 people = extra 3840 so 20 more people will be 4800 extra = 23400 so 23400 / 60 = 390.


  3. 24 workers to 40 workers which is 5/3 times increase so there will be a decrease in fixed charges per head which is 3/5 times.
    Say x for 1st condn. so 2nd condn. it will be 3x/5.
    Difference in the fixed charge per head is 615-465=150= x- 3x/5= 2x/5,so x=375
    so varying charge per head is 615-375=240
    when considering 3rd cond. workers became 5/2times 1st cond. So fixed charge will become 2/5*375=150
    so avg total expense/head=150+240=390.

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