Mixed Costs and Cost Formula Callie's Gym is a complete fitness center. Owner Callie Ducain employs various fitness trainers who are expected to staff the front desk and to teach fitness classes. While on the front desk, trainers answer the phone, handle walk-ins and show them around the gym, answer member questions about the weight machines, and do light cleaning (wiping down the equipment, vacuuming the floor). The trainers also teach fitness classes (e.g., pilates, spinning, body pump) according to their own interest and training level. The cost of the fitness trainers is $600 per month and $20 per class taught. Last month, 100 classes were taught. Required: 1. Develop a cost equation for total cost of labor. Total labor cost = $fill in the blank 1 + $fill in the blank 2 per class taught 2. What was total variable labor cost last month? $fill in the blank 3 3. What was total labor cost last month? $fill in the blank 4 4. What was the unit cost of labor (per class) for last month? $fill in the blank 5 per class 5. What if Callie increased the number of classes offered by 50 percent? a. What would be the total labor cost? $fill in the blank 6 b. The unit labor cost? $fill in the blank 7 c. Explain why the unit labor cost decreased.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Mixed Costs and Cost Formula
Callie's Gym is a complete fitness center. Owner Callie Ducain employs various fitness trainers who are expected to staff the front desk and to teach fitness classes. While on the front desk, trainers answer the phone, handle walk-ins and show them around the gym, answer member questions about the weight machines, and do light cleaning (wiping down the equipment, vacuuming the floor). The trainers also teach fitness classes (e.g., pilates, spinning, body pump) according to their own interest and training level. The cost of the fitness trainers is $600 per month and $20 per class taught. Last month, 100 classes were taught.
Required:
1. Develop a cost equation for total cost of labor.
| Total labor cost | = | $fill in the blank 1 | + | $fill in the blank 2 per class taught |
| 2. | What was total variable labor cost last month? |
| $fill in the blank 3 |
| 3. | What was total labor cost last month? |
| $fill in the blank 4 |
| 4. | What was the unit cost of labor (per class) for last month? |
| $fill in the blank 5 per class |
| 5. | What if Callie increased the number of classes offered by 50 percent? |
| a. | What would be the total labor cost? |
| $fill in the blank 6 | |
| b. | The unit labor cost? |
| $fill in the blank 7 | |
| c. | Explain why the unit labor cost decreased. |
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