Homework SourseCost Behavior Sushil and Sunil own a local Subway and they r
| Cost Behavior | |||||||
| Sushil and Sunil own a local Subway, and they reported the following results for Nov and Dec | |||||||
| Nov | Dec | ||||||
| Unit Sales | 1,500 | 2,000 | |||||
| Cost of Food Sold | $ 3,000 | $ 4,000 | |||||
| Wages and Salaries | 1,525 | 1,675 | |||||
| Rent | 1,500 | 1,500 | |||||
| Depreciation | 200 | 200 | |||||
| Utilities | 710 | 770 | |||||
| Supplies | 450 | 600 | |||||
| Miscellaneous | 75 | 100 | |||||
| Total | $ 7,460 | $ 8,845 | |||||
| a. Identify each cost as being fixed, variable or mixed. | |||||||
| b. Determine the equation for total operating costs (Fixed + Unit Variable Cost * # of sandwiches) | |||||||
| c. Predict the total operating costs for | 2500 | 3500 | sandwiches | ||||
| d. Determine the average costs for | 2500 | 3500 | sandwiches | ||||
| Cost Behavior | |||||||
| Sushil and Sunil own a local Subway, and they reported the following results for Nov and Dec | |||||||
| Nov | Dec | ||||||
| Unit Sales | 1,500 | 2,000 | |||||
| Cost of Food Sold | $ 3,000 | $ 4,000 | |||||
| Wages and Salaries | 1,525 | 1,675 | |||||
| Rent | 1,500 | 1,500 | |||||
| Depreciation | 200 | 200 | |||||
| Utilities | 710 | 770 | |||||
| Supplies | 450 | 600 | |||||
| Miscellaneous | 75 | 100 | |||||
| Total | $ 7,460 | $ 8,845 | |||||
| a. Identify each cost as being fixed, variable or mixed. | |||||||
| b. Determine the equation for total operating costs (Fixed + Unit Variable Cost * # of sandwiches) | |||||||
| c. Predict the total operating costs for | 2500 | 3500 | sandwiches | ||||
| d. Determine the average costs for | 2500 | 3500 | sandwiches | ||||
Solution
a
(b)
c.total operating cost
2500=1605+(2.77*25,00)=8,530
3500=1605+(2.77*35,00)=11,300
(d)
Average8530+11300/2
=9915
| Nov | Dec | Cost per unit | Cost per unit | |||
| Unit Sales | 1,500.00 | 2,000.00 | ||||
| Cost of Food Sold | 3,000.00 | 4,000.00 | 2.00 | 2.00 | Variable | cost per unit is same |
| Wages and Salaries | 1,525.00 | 1,675.00 | 1.02 | 0.84 | Mixed | |
| Rent | 1,500.00 | 1,500.00 | 1.00 | 0.75 | Fixed | Total cost is same |
| Depreciation | 200.00 | 200.00 | 0.13 | 0.10 | Fixed | Total cost is same |
| Utilities | 710.00 | 770.00 | 0.47 | 0.39 | Mixed | |
| Supplies | 450.00 | 600.00 | 0.30 | 0.30 | Variable | cost per unit is same |
| Miscellaneous | 75.00 | 100.00 | 0.05 | 0.05 | Variable | cost per unit is same |
| Total | ||||||
| 7,460.00 | 8,845.00 |
