Judith Corporation has its own cafeteria with the following annual costs:Food - Ph 100,000; Labor-Ph 75,0o00; Overhead - Ph 110,000. Theoverhead is 40% fixed. Of the fixed overhead, Ph 25,000 is the salary ofthe cafeteria supervisor. The remainder of the fixed overhead has beenallocated from total company overhead. Assuming the cafeteria supervisorwill remain and that Judith will continue to pay his/her salary, the maximumcost Judith will be willing to pay an outsider firm to service the cafeteria isPh 285,000Ph 175,000Ph 219,000Ph 241,000

In this case the costs are variable and fixed overhead costs. The amount Judith would be willing to…

allocated from total company overnead. Assuming the cafeteria supervisor will remain and that Judith will continue to pay his/her salary, the maximum cost Judith will be willing to pay an outsider firm to service the cafeteria is

allocated from total company overnead. Assuming the cafeteria supervisor will remain and that Judith will continue to pay his/her salary, the maximum cost Judith will be willing to pay an outsider firm to service the cafeteria is

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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