Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has thecapacity to make 13.200 gallons of the single flavor, GUI Chewy, annually. The plant has only two customers, Chuck's Gas & Go andMarcee's Drive & Chew DriveThru. Annual orders for Chuck's total 6,600 gallons and annual orders for Marcee's total 3,300 gallons.Variable manufacturing costs are S1.30 per gallon, and annual fixed manufacturing costs are $19,800.The ice cream business has two seasons, summer and winter. Each season lasts exactly six months. Chuck's orders 3,300 gallons inthe summer and 3,300 gallons in the winter. Marcee's is closed in the winter and orders all 3,300 gallons in the summer.In discussing their business, Cathy and Tom realize that there are really three seasons instead of two, the third being the fall and spring(as a combined season). Each of the three seasons lasts exactly four months. They also know that Marcee's opens in mid-spring andcloses in mid-fal.Cathy and Tom check the order patterns and see the following demand (in gallons) in each of the three seasons:Fall andSpring2, 2001,100Summer2,2002, 2004,400Total6,6003,3009,900Winter2,200Chuck'sMarcee'sTotal2,2003,300Required:Design the cost system for Cathy and Tom showing the capacity costs and capacity in each season. (Round "Fixed cost" and "Variablecost" to 2 decimel places.) Required:Design the cost system for Cathy and Tom showing the capacity costs and capacity in each season (Round "Fixed cost" and "Variablecost" to 2 decimal places.)Capacity CostsWinterFall/SpringSummerTotalUnusedUsedCharge for unusedTotal capacity costsProduction (gallons)Fixed cost (por gallon)Variable cost (per gallon)Total product cost (per galon)

Name: Cathy and Tom's Specialty Ice Cream Company operates a small producti
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Description: Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has thecapacity to make 13.200 gallons of the single flavor, GUI Chewy, annually. The plant has only two customers, Chuck's Gas &

Capacity cost Winter Fall Spring Summer Total 4400 4400 4400 Unused 2200 1100 -…

Answered: Design the cost system for Cathy and…

Business

Accounting

Design the cost system for Cathy and Tom showing the capacity costs and capacity in each season

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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