Cost Behavior Analysis in a Restaurant: High-Low Cost EstimationAssume a Papa John's restaurant has the following information available regarding costs at representative levels of monthly sales:Monthly sales in units5,0008,000 10,000Cost of food sold$10,000 $16,000 $20,000Wages and fringe benefits4,2004,3204,400Fees paid delivery help1,1001,7602,200Rent on building1,1001,1001,100Depreciation on equipment900900900Utilities8009201,000Supplies (soap, floor wax, etc.)250340400Administrative costs1,7001,7001,700Total$20,050 $27,040 $31,700(a) Identify each cost as being variable, fixed, or mixed.Cost of food soldWages and fringe benefitsFees paid delivery help

A fixed cost is a cost that does not change with the change in the level of activity. These expenses…

Answered: Cost Behavior Analysis in a Restaurant:…

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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Izzy Ice Cream has the following price and cost information: Price per 2-scoop sundae Variable costs per sundae: Ingredients Direct labor Overhead Fixed costs per month. Required: Required 1 Required 2 $ 5.00 Break-even units Break-even sales 1.35 0.45 0.20 $ 6,300 Required 3 Required 4 Determine Izzy's break-even point in units and sales dollars. sundaes
Use CVP and compute the room sales to achieve break even for a single product motel with total fixed cost or 40,000 an average room rate of $80 and a variable cost per room of $30
ceive full credit you must show your as a template. Practice Problems 1)Corp sells several products. Information on average revenue and costs is as follows: Selling price per unit $28.50 Variable costs per unit: Direct material $5.50 Direct manufacturing labor $1.15 Manufacturing overhead $0.85 Selling costs $2.50 $125,000 ulations Annual fixed costs How much is operating income if the company sells 15,000 units? 2) If the company decides to lower its selling price by 10%, the operating income is reduced by how r hour: firm (this is conceptually similar to the O/H allocation year 2015, O/H cost estimates total $840,000 for an 2015, it decided to evaluate the use of additional ined that number of design changes, setups, and llowing information was gathered during the analysis: S 0 ! Activity level 300 design changes 5,000 setups 8,000 inspections pital Systems, are expected to use the following lospital Systems 76,000 0 10 38 e O/H cost estimate for Money Managers for a deluxe model.…
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Analyze Cityscape Hotels Cityscape Hotels has 200 rooms available in a major metropolitan city. The hotel is able to attract business customers during the weekdays and leisure customers during the weekend. However, the leisure customers on weekends occupy fewer rooms than do business customers on weekdays. Thus, Cityscape plans to provide special weekend pricing to attract additional leisure customers. A hotel room is priced at $180 per room night. The cost of a hotel room night includes the following: Line Item Description Cost Per Room Night(at normal occupancy) Housekeeping service $23 Utilities 7 Amenities 3 Hotel depreciation 55 Hotel staff (excluding housekeeping) 42 Total $130 The special weekend price is proposed for $120 per room night. At this price, it is anticipated that average occupancy for the weekend (Friday, Saturday, and Sunday) will increase from 30% to 50% of available rooms. Question Content Area a. What is the contribution margin for a…
Problem 1 Xpress Corp. operates a fast food restaurant in San Fernando. Meals cost an average of $36 for which Xpress incurs variable costs of $14.40. Total fixed costs are $29,160. Required: a) Determine break even in units (persons) and sales dollars using the contribution margin technique. b) If the expected revenue is $ 65,000, what is Xpress' margin of safety ratio? c) If Xpress wants to earn a target income of $20,000, calculate the number of meals necessary.
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Use CVP and compute the food covers necessary to achieve break even for a single product restaurant with total fixed cost of $ 16,000, an average check of $ 15, and a variable cost per cover of $. 7.
OPTION 1: Crestview Country Club a. Fixed rental cost of $1,000 b. $11 per person for food OPTION 2: Tallgrass Country Club a. Fixed rental cost of $3,000 b. A caterer who charges $8.00 per person for food Southwestern College has budgeted $1,800 for administrative and marketing expenses. It plans to hire a band, which will cost another $2,000. Tickets are expected to be $35 per person. Local business supporters will donate any other items required for the event. A) Which option provides the least amount of risk? A) Option one B) Option two C) Both options provide the same amount of risk. D) Neither option has risks. E) Without probability assignments, it is not possible to determine the riskier option. 2B) What is the break-even point in units for each option? A) 96 units and 114 units, respectively B) 120 units and 187 units, respectively C) 56 units and 137 units, respectively D) 200 units and 252 units, respectively E) 156 units and 219 units, respectively C) What is the operating…

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