Sugar Magnolia Company operates a cafeteria for its employees. The number of meals served each week over the last seven weeks, along with the total costs of operating the cafeteria are given below:   Meals Served Cafeteria Costs Week 1 1,625 $5,080 Week 2 1,325 $3,980 Week 3 1,550 $4,940 Week 4 1,400 $4,700 Week 5 1,650 $5,100 Week 6 1,800 $5,380 Week 7 1,975 $5,540 Week 8 2,000 $5,640    Assume that the relevant range includes all of the activity levels mentioned in this problem.  Using the high-low method: the variable cost per meal served in the cafeteria would be estimated to be: $_____________________________  b.)  the estimated fixed cost per week is: $______________________________

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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   Sugar Magnolia Company operates a cafeteria for its employees. The number of meals served each week over the last seven weeks, along with the total costs of operating the cafeteria are given below:

 

Meals Served

Cafeteria Costs

Week 1

1,625

$5,080

Week 2

1,325

$3,980

Week 3

1,550

$4,940

Week 4

1,400

$4,700

Week 5

1,650

$5,100

Week 6

1,800

$5,380

Week 7

1,975

$5,540

Week 8

2,000

$5,640

 

 Assume that the relevant range includes all of the activity levels mentioned in this problem.

 Using the high-low method:

  1. the variable cost per meal served in the cafeteria would be estimated to be:

$_____________________________

 b.)  the estimated fixed cost per week is:

$______________________________

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