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(b) Use the high-low method to develop a schedule identifying the amount of each cost that is fixed per month or variable per unit. Total the amounts under each category to develop an equation for total monthly costs. Round variable cost answers to two decimal places. Fixed Costs Variable Costs OMS 24,000 XX ox DMX OU ONX ON 0x Ox 0x ON OMX 0x Oxx Ox Ox OXS OMX Cost of food sold Wages and fringe benefits Fees paid delivery help Rent on building Depreciation on equipment Utilities Supplies (soap. floor wax, etc.) Administrative costs Total costs equation S (c) Predict total costs for a monthly sales volume of 9,900 units. $ 19,800 Check

(b) Use the high-low method to develop a schedule identifying the amount of each cost that is fixed per month or variable per unit. Total the amounts under each category to develop an equation for total monthly costs. Round variable cost answers to two decimal places. Fixed Costs Variable Costs OMS 24,000 XX ox DMX OU ONX ON 0x Ox 0x ON OMX 0x Oxx Ox Ox OXS OMX Cost of food sold Wages and fringe benefits Fees paid delivery help Rent on building Depreciation on equipment Utilities Supplies (soap. floor wax, etc.) Administrative costs Total costs equation S (c) Predict total costs for a monthly sales volume of 9,900 units. $ 19,800 Check

FINANCIAL ACCOUNTING
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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(b) Use the high-low method to develop a schedule identifying the amount of each cost that is fixed per month or variable per unit. Total the amounts under each category to develop an equation for total monthly costs. Round variable cost answers to two decimal places. Fixed Costs Variable Costs Cost of food sold Wages and fringe benefits Fees paid delivery help Rent on building Depreciation on equipment Utilities Supplies (soap, floor wax, etc.) Administrative costs Total costs equation S Check 05 24,000 XXI 0x DU 0x 0x 0x 0x ox 0.X S DXX 0xx 0X OX ОКХ Oxx 0x OXX (c) Predict total costs for a monthly sales volume of 9,900 units. $ 19,800 x
Transcribed Image Text:(b) Use the high-low method to develop a schedule identifying the amount of each cost that is fixed per month or variable per unit. Total the amounts under each category to develop an equation for total monthly costs. Round variable cost answers to two decimal places. Fixed Costs Variable Costs Cost of food sold Wages and fringe benefits Fees paid delivery help Rent on building Depreciation on equipment Utilities Supplies (soap, floor wax, etc.) Administrative costs Total costs equation S Check 05 24,000 XXI 0x DU 0x 0x 0x 0x ox 0.X S DXX 0xx 0X OX ОКХ Oxx 0x OXX (c) Predict total costs for a monthly sales volume of 9,900 units. $ 19,800 x
Cost Behavior Analysis in a Restaurant: High-Low Cost Estimation Assume a Papa John's restaurant has the following information available regarding costs at representative levels of monthly sales: Cost of food sold Wages and fringe benefits Fees paid delivery help Rent on building Depreciation on equipment Utilities Supplies (soap, floor wax, etc.) Administrative costs Total Monthly sales in units 5,000 8,000 10,000 $15,000 $24,000 $30,000 4,350 4,560 4,700 1,300 2,080 2,600 1.300 1,300 1,300 400 400 400 750 840 900 150 180 200 1.500 1.500 1,500 $24.750 $34,860 $41,600 (a) Identify each cost as being variable, fixed, or mixed. Cost of food sold Wages and fringe benefits Fees paid delivery help Rent on building Depreciation on equipment Variable # Mixed ● Variable ÷ Fixed Fixed
Transcribed Image Text:Cost Behavior Analysis in a Restaurant: High-Low Cost Estimation Assume a Papa John's restaurant has the following information available regarding costs at representative levels of monthly sales: Cost of food sold Wages and fringe benefits Fees paid delivery help Rent on building Depreciation on equipment Utilities Supplies (soap, floor wax, etc.) Administrative costs Total Monthly sales in units 5,000 8,000 10,000 $15,000 $24,000 $30,000 4,350 4,560 4,700 1,300 2,080 2,600 1.300 1,300 1,300 400 400 400 750 840 900 150 180 200 1.500 1.500 1,500 $24.750 $34,860 $41,600 (a) Identify each cost as being variable, fixed, or mixed. Cost of food sold Wages and fringe benefits Fees paid delivery help Rent on building Depreciation on equipment Variable # Mixed ● Variable ÷ Fixed Fixed
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