Mountain Dental Services is a specialized dental practice whose only service is filling cavities. Mountain has recorded the following for the past nine months: Month Number of Cavities Filled Total Cost January 625 $5,600 February 700 6,000 March 500 4,500 April 425 4,100 May 450 4,500 June 300 3,200 July 375 3,500 August 550 4,900 September 575 5,400 1. Use the high-low method to estimate total fixed cost and variable cost per cavity filled. 2. Using these estimates, calculate Mountain’s total cost for filling 500 cavities.

Mountain Dental Services is a specialized dental practice whose only service is filling cavities. Mountain has recorded the following for the past nine months: Month Number of Cavities Filled Total Cost January 625 $5,600 February 700 6,000 March 500 4,500 April 425 4,100 May 450 4,500 June 300 3,200 July 375 3,500 August 550 4,900 September 575 5,400 1. Use the high-low method to estimate total fixed cost and variable cost per cavity filled. 2. Using these estimates, calculate Mountain’s total cost for filling 500 cavities.

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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Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June: Fixed Variable Element Element per Liter per Month Revenue $ 25.00 Raw materials Wages $ 6,900 $5.95 $ 2.70 Utilities Rent $ 2,930 $ 3,900 $ 1.50 Insurance $,2,650 Miscellaneous $ 780 Actual Total for June $ 151,540 $ 39,030 $ 23,500 $13,000 $ 3,900 $ 2,650 1.65 $ 10,890 While gelato is sold by the cone or cup, the shop measures its activity in terms of the total number of liters of gelato sold. For example, wages should be $6,900 plus $2.70 per liter of gelato sold and the actual wages for June were $23,500. Via Gelato expected to sell 6,200 liters in June, but actually sold 6,400 liters. Required: Calculate Via Gelato revenue and spending variances for June. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Revenue…
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Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June: Revenue Raw materials Wages Utilities Rent Insurance Miscellaneous Revenue Expenses: Raw materials Fixed Element per Month Via Gelato Revenue and Spending Variances For the Month Ended June 30 Wages Utilities Rent $ 7,200 $ 3,230 $ 4,200 $ 2,950 $ 810 While gelato is sold by the cone or cup, the shop measures its activity in terms of the total number of liters of gelato sold. For example, wages should be $7,200 plus $3.00 per liter of gelato sold and the actual wages for June were $26,300. Via Gelato expected to sell 6,200 liters in June, but actually sold 6,400 liters. Insurance Miscellaneous Variable. Element per Liter $ 28.00 $ 6.25 $ 3.00 $ 1.80 Required: Calculate Via Gelato revenue and spending variances for June. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,…
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Month	Number of Cavities Filled	Total Cost
January	625	$5,600
February	700	6,000
March	500	4,500
April	425	4,100
May	450	4,500
June	300	3,200
July	375	3,500
August	550	4,900
September	575	5,400