Westlake Fitness Centers operates a chain of gyms, and their supply costs for different months are listed below: Month Client-Visits Supply Cost March 12,050 $29,620 April 11,830 $29,512 May 12,400 $29,855 June 13,100 $30,174 July 11,980 $29,535 August 11,500 $29,302 September 12,420 $29,860 October 11,920 $29,518 November 12,080 $29,589 Management believes that supply cost is a mixed cost that depends on client visits. Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first, rounding to the nearest whole cent. Then compute the fixed component, rounding to the nearest whole dollar.

Westlake Fitness Centers operates a chain of gyms, and their supply costs for different months are listed below: Month Client-Visits Supply Cost March 12,050 $29,620 April 11,830 $29,512 May 12,400 $29,855 June 13,100 $30,174 July 11,980 $29,535 August 11,500 $29,302 September 12,420 $29,860 October 11,920 $29,518 November 12,080 $29,589 Management believes that supply cost is a mixed cost that depends on client visits. Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first, rounding to the nearest whole cent. Then compute the fixed component, rounding to the nearest whole dollar.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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The Fitness Club has two operating departments- Programming & Classes and Individual fitness. There are also two service centers- Janitorial and Cafeteria. Janitorial costs are allocated based on square footage, while Cafeteria costs are allocated based on number of employees. The costs traceable to the operating and service center during 2019 were as follows: Service Centers Operating Departments Programming & Classes Individual Janitorial Cafeteria Fitness Materials 5,000 Labor МОН P 10,000 P 200,000 P 8,000 100,000 20,000 130,000 1,600 5 300,000 40,000 540,000 8,000 14 265,000 75,000 348,000 24,000 19 150,000 90,000 245,000 32,000 Total Square footage No. of Employee In addition to these costs, the Cafeteria generates revenues of P480,000. Janitorial is allocated based on square footage and Cafeteria is allocated based on the number of employees. Using the step method to allocate the service center costs, what is the total cost of Programming and Classes?
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Tom’s Shoe Repair provides a variety of shoe and repair services. Analysis of monthly costs revealed the following cost formulas when direct labor hours are used as the basis of cost determination: Supplies: y = $0 + $4.00X Production supervision and direct labor: y = $500 + $7.00X Utilities: y = $350 + $5.40X Rent: y = $450 + $0.00X Advertising: y = $75 + $0.00X a. Prepare a flexible budget at 250, 300, 350, and 400 direct labor hours. b. Calculate a total cost per direct labor hour at each level of activity. c. Tom’s employees usually work 350 direct labor hours per month. The average shoe repair requires 1.25 labor hours to complete. Tom wants to earn a 40 percent margin on his cost. What should be the average charge per customer, rounded to the nearest dollar to achieve Tom’s profit objective?
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Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent. Cost Machine Hours March $3,140 15,134 April 2,606 10,115 May 2,803 11,896 June 3,889 18,146 a.$0.16 b.$1.12 c.$1.08 d.$1.60
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Via Gelato is a popular nelghborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June: Fixed Actual Element Element per Total for Liter $ 23.00 $ 5.75 $ 2.50 $ 1.30 Jane per Month 5 140,540 37,030 $ 21,800 $11,600 $3,700 $ 2,450 $ 9,390 Revenue Rav materiale Wages Utilities $ 6,700 $2,730 $3,700 $2,450 $ 760 Rent Innurance Miscellaneoun 1.45 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 $6,700 plus $2.50 per liter of gelato sold and the actual wages for June were $21,800. Vla Gelato expected to sell 6,100 lters in June, but actually sold 6,300 liters. Required: Calculate Via Gelato revenue and spending varlances for June. (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero variance). Input all amounts as positive values.) Via Gelato Revenue and…
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Given the following cost and activity observations for Bounty Company’s utilities, use the high-low method to determine Bounty’s variable utilities cost per machine hour. Round to the nearest cent. Cost Machine Hours March $3,139 14,709 April 2,650 9,989 May 2,817 12,342 June 3,656 17,720 a. $0.74 b. $0.13 c. $1.43 d. $0.78