The Gourmand Cooking School runs short cooking courses at its small campus. Management has identifled two cost drivers it uses in Its budgeting and performance reports-the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 50 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Cost per Cost per Course $3,080 Month Student Instructor vages Classroon supplies Utilities Campus rent Insurance Administrative expenses $260 870 $ 4, 200 $1,890 $3,270 $ 130 For example, administrative expenses should be $3.270 per month plus $15 per course plus $4 per student. The company's sales should average $800 per student. The company planned to run three courses with a total of 45 students; however, it actually ran three courses with a total of only 42 students. The actual operating results for September appear below. Actual $ 32,400 $ 9,080 $8,540 $ 1,530 Revenue Instructor vages classroom supplies Utilities Campus rent

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identifled two cost drivers it uses in Its budgeting and performance reports-the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 50 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost per Cost per Cost per Course $3,080 Month Student Instructor vages Classroon supplies Utilities Campus rent Insurance Administrative expenses $260 870 $ 4, 200 $1,890 $3,270 $ 130 For example, administrative expenses should be $3.270 per month plus $15 per course plus $4 per student. The company's sales should average $800 per student. The company planned to run three courses with a total of 45 students; however, it actually ran three courses with a total of only 42 students. The actual operating results for September appear below. Actual $ 32,400 $ 9,080 $8,540 $ 1,530 Revenue Instructor vages classroom supplies Utilities Campus rent

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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The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports-the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 62 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Courses Students Revenue Expenses: For example, administrative expenses should be $4,000 per month plus $43 per course plus $6 per student. The company's sales should average $880 per student. Instructor wages Classroom supplies Utilities Campus rent Insurance Fixed Cost per Cost per Cost per Month Student Course $ 2,940 $65 The company planned to run four courses with a total of 62 students; however,…
Gonzales Corp. needs to set a target price for its newly designed product EverReady. The following data relate to this product. Per Unit Total Direct Material $20 Direct Labor $40 Variable manufacturing Overhead $10 Fixed manufacturing overhead $1,200,000 Variable selling and administrative $5 Fixed selling and administrative $1,120,000 The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Gonzales uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the accounting department provides information under both approaches using a markup of 50% on absorption cost and a markup of 70% on variable cost.…
Assume that a company has two cost drivers-number of courses and number of students. The planned number of courses and students were 5 and 100, respectively. The actual number of courses and students were 6 and 110, respectively. One of the company's expenses is influenced by both cost drivers. Its cost formulas are $58 per course and $7 per student. The total cost included in the planning budget for this expense would be:Multiple Choice$890.$ 990.$1,090.$1,190.
4 Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers-the number of cruises and the number of passengers-that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 85 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: Vessel operating costs. Advertising Administrative costs Insurance Fixed Cost per Cost per Month Cruise $ 6,700 $ 473.00 $3,000 $ 5,100 $ 3,400 $ 40.00 Cost per Passenger $ 3.10 $ 1.50 For example, vessel operating costs should be $6,700 per month plus $473.00 per cruise plus $3.10 per passenger. The company's sales should average $28.00 per passenger. In July, the company provided 56 cruises for a total of 3,050 passengers.
A local picnic table manufacturer has budgeted these overhead costs - ERROR: "Handling materials" is $33,350 - (note their order as you will use the same order down below): They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown (again, note their order): Recent success has yielded an order for 1,000 tables. Assume direct labor costs per hour of $20. Determine how much the job would cost given the following activities (once more, note their order for the last worksheet): Using the following cost driver terms, complete the two worksheets below to: Number of material moves Direct labor Manufacturing overhead Number of purchase orders Number of machine setups Number of inspections Direct materials Square feet occupied PLEASE NOTE: For activity levels, use commas as needed (i.e. 1,234). Activity rates are rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). All other dollar amounts are rounded to…
Sophia's Restaurant served 5,500 meals last quarter. Sophia recorded the following costs with those meals. Variable costs: Ingredients used Direct labor Indirect materials and supplies Utilities Fixed costs: Managers' salaries Rent Depreciation on equipment (straight-line, time basis) Other fixed costs $15,250 11,500 Total variable costs Total fixed costs Total costs Unit costs 6,300 2,700 24,500 20,500 4,500 5,670 Required: Unit variable costs and total fixed costs are expected to remain unchanged next quarter. Calculate the unit cost and the total cost if 4,950 meals are served next quarter. (Round "Unit costs" answer to 2 decimal places.)
Angie March owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the summer months and year-end holidays and light demand at other times. Angle has gathered the following cost information from the past year: A.) Identify the high and low points (Activity level) $ High Low Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost per month. (Round variable cost to 2 decimal places, eg. 15.25 and fixed cost 5 O decimal places, e.g. 5,275.) Variable cost = $________ per labor hour. Fixed cost=$____________ B.) Angie has booked 4,200 labor hours for the coming month. How much overhead should she expect to incur? Total Cost =$______ C.) If Angie books one more catering job for the month, requiring 350 labor hours. how much additional overhead should she expect to incur? Additional…
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Silver Law Firm – Case Study Silver Law firm provides litigation and mediation services to a variety of clients. Attorneys keep track of the time they spend on each case, which is used to charge fees to clients at a rate of $300 per hour. A management advisor commented that activity-based costing might prove useful in evaluating the costs of its legal services, and the firm has decided to evaluate its fee structure by comparing ABC to its alternative cost allocations. The following data relate to a typical month at the firm. During a typical month the firm handles seven mediation cases and three litigation cases.
please answer question 1,2 and 3 An electrical component manufacturer budgets to sell 35,000 units although the factory has the capacity to produce 40,000 units under normal circumstances. Direct costs per unit are as follows: Wages $2.00 Materials $8.00 Overheads $4.00 Fixed costs for the period are expected to be $200,000. The selling price is $22 per unit. You are going to: Calculate how many units must be made and sold in order to breakeven during the period and then express the information on a CVP chart. 2. Ascertain the budgeted profit for the period, if 35,000 units are sold. 3. State the number of units to be manufactured when the amount of capital invested in this production is $640,000 and the directors require a 20% return on capital employed.
Topic Marginal costing. Gia’s Foods produces frozen meals, which it sells for $8 each. The company computes a new monthly fixed manufacturing overhead rate based on the planned number of meals to be produced that month. All costs and production levels are exactly as planned. The following data are from Gia’s Foods first month in business. Sales 1,000 meals Production 1400meals Variable manufacturing cost per meal $4.00 Sales commission cost per meal $1.00 Total fixed manufacturing overhead…
Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost Employee Hours January $7,000 360 February 8,140 550 March 9,899 630 April 9,787 600 May 8,490 480 June 7,450 350 July 9,490 570 August 7,531 310 Coefficients shown by a regression program for Pizza Vesuvio's data are: Intercept 4,497 X Variable 8.26 In your calculations, round the variable rate per employee hour to the nearest cent. Required: Use the results of regression to make the following calculations: 1. Calculate the fixed cost of labor.$fill in the blank 1 Calculate the variable rate per employee hour.$fill in the blank 2per employee hour 2. Construct the cost formula for total labor cost.Total labor cost = $fill in the blank 3 + ($fill in the blank 4 × Employee hours) 3. Calculate the budgeted…