Refer to problems 35 and 36.

Quality Meals hired an engineering consulting firm to perform an engineering estimate of its business costs. The consulting firm came up with the following monthly cost estimates based on information for the current period:

Required:

a. Assuming the following level of cost-driver volume for a month, what is the estimated cost using the engineering estimates ' (Don't forget to include the facilities costs m your estimate.)

b. Quality Meals is considering outsourcing delivery. Compared to your answer in requirement a., how much would the company save b> outsourcing the delivery service (before considering the cost of outsourcing)?

Transcribed Image Text:

Facilities costs..... Meal production-level costs Delivery costs..... VIP services costs New customer costs New product costs $9,500 $1.90 per meal produced $11 per delivery $38 per service $1.250 per new customer $1.000 per new product