16-32 Common costs. Jeana's Cupcake Shop and Jody's Cakes each operate a bakery close to each other ina small town in Florida. If Jeana rents ovens on her own, it will cost $40,000. If Jody rents ovens on her own, it willcost $60,000. If they consolidate baking operations and share ovens, the total cost will be $80,000.1. Calculate Jeana's and Jody's respective cost of the shared ovens under the stand-alone cost-allocationmethod.2. Calculate Jeana's and Jody's respective cost of the shared ovens using the incremental cost-allocationmethod assuming (a) Jeana is the primary party and (b) Jody is the primary party.3. Calculate Jeana's and Jody's respective cost of the shared ovens using the Shapley value method.4. Which method would you recommend Jeana and Jody use to share the cost of the ovens? Why?

"Since you have asked multiple sub part question we will solve the first three sub part question for…

Answered: 16-32 Common costs. Jeana's Cupcake…

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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Joey Bag-o-donuts owns an ice cream shop. Looking at last year's utility bills, the highest utility bill was $4000 for 2000 machine hours. The lowest utility bill was $2500 for 1200 machine hours. Calculate the variable rate per machine hour and the total fixed utility cost. Show the equation for determining total utility costs. If Joey plans on using 1500 machine hours, what will the total utility bill be using the equation in part 2.
Elizabeth and William are considering offering a doggy day-care service. After some research, they found several pet day-care facilities in their area, but they were expensive! Further, the facilities were sterile and didn't provide a "homey" or fun environment for pets. Elizabeth and William felt they could easily fix these shortcomings. Elizabeth's home would be the location for their business, since it already has a fenced-in yard and is located two blocks from a dog park. Estimated costs for building an outdoor shelter, plus other licensing and business start-up costs, are as follows. Shelter (depreciated over 7 years) Licensing and other annual costs Hourly wage for hired labor; planned for only 200 hours per year Variable costs for food Estimated volume of dogs per day (open for business 5 days per week, 50 weeks per year; average length of stay 8 hours per day) $600 per year $700 per year $16 per hour $16 per day per dog. 24 per day
Old MacDonald produces hay. He has a single employee, Jack. If Jack works for x hours he can produce x bales of hay. Each bale of hay sells for $1. The cost to Jack of working x hours is c(x) = x2/10. (a) What is the efficient number of bales of hay for Jack to cut? _____________ (b) If the most that Jack could earn elsewhere is zero, how much would MacDonald have to pay him to get him to work the efficient amount? ______________ (c) What is MacDonald’s net profit? _______________ (d) Suppose that Jack would receive $1 for passing out leaflets, an activity that involves no effort whatsoever. How much would he have to receive from MacDonald for producing the efficient number of bales of hay? ____________ (e) Suppose now that the opportunity for passing out leaflets is no longer available, but that MacDonald decides to rent his hayfield out to Jack for a flat fee. How much would he rent it for? ___________
You own a firewood business that involves chopping down trees, sawing them into lumber and transporting to the market. You can cut the trees into 2X4s where they are cut down or after being transported to the market. Cutting down trees Sawing trees into lumber Transporting trees to $65 per ton the market $38 per ton $110 per ton Transporting 2X4s to $45 per ton the market a. Where should you locate the sawmill to minimize costs? Why? b. Where should you locate the sawmill if the price of lumber is $190 per ton? $215?
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Lois is planning to make fancy, multi-tiered wedding cakes for the next wedding season. To make the cakes, she must invest $2900 in some special baking tools. To promote her business, she also needs to spend $6265 to advertise in the newspaper. She estimates that supplies and materials for each cake will cost $690. She is planning to set the price for each cake at $925. (a) Compute the contribution margin. (b) Compute the contribution rate. (c) Compute the break-even point in units. (d) Compute the break-even point in sales dollars. (a) The contribution margin per unit is $ (Type a whole number.) (b) The contribution rate is%. (Round to two decimal places as needed.) (c) The break-even point is cakes. (Round up to the nearest unit.) (d) The break-even point in sales dollars is $. (Type a whole number.)
Nik.1
im decides he would like start a part-time business building birdhouses. His fixed costs are minimal at $401.89 as he would build them out of his garage at home and already has all of the tools he would need. A quick look at competitor's prices leads him to believe that the average price a customer will pay for each birdhouse is $62.42. His unit variable cost for a birdhouse is $35.43 (for labour, wood and shingles). Calculate the break-even point. (Round up your answer to the next whole number.) Number of birdhouses:
The Farm House restaurant makes their own bread to serve in their restaurant. They have been approached by a local bakery offering to make the bread for them. The restaurant has two choices:1) continue making the bread in-house, or 2) buy it from the local bakery.The Farm House head chef estimated the variable cost of making each loaf of bread to include the following:Sales prices and variable costs are as follows: $0.69 of ingredients, $0.25 of variable overhead, and direct labor costs to knead and form the loaves of $0.70. Allocating fixed overhead is based on direct labor. The Farm House assigns a fixed overhead cost of $1.07 per loaf. None of the fixed costs are avoidable. The local bakery would charge $1.75 per loaf.1. What is the full product unit cost of making bread in-house?The Farm House Direct Materials Direct Labor Variable manufacturing overhead Fixed manufacturing overhead Cost per loaf of bread 2. Should the restaurant bake the bread…

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