Account Analysis Method Shirrell Blackthorn is the accountant for several pizza restaurants based in a tri-city area. The president of the chain wanted some help with budgeting and cost control, sa Shirrell decided to analyze the accounts for the past She divided the accounts into four different categories, depending on whether they appeared to be primarily fixed or to vary with one of three different drivers. Food and wage costs appeared to vary with the total sales dollars. Delivery costs varied with the number of miles driven (workers were required to use their own cars and were reimbursed for miles driven). A group of other costs, including purchasing, materials handling, and purchases of kitchen equipment, dishes, and pans, appeared to vary with the number of different product types (e.g., pizza, salad, and lasagna). Shirrell came up with the following monthly averages: Food and wage costs Delivery costs Other costs $175,000 $18,000 $9,520 Fixed costs $255,000 Sales revenue $560,000 Delivery mileage in miles 8,000 Number of product types 14 Required: 1. Calculate the average variable rate for the following costs: food and wages, delivery costs, and other costs. If required, round your answers to two decimal places. Use your rounded answers in subsequent computations if necessary, Average Variable Rate Food and wages 31 X % Delivery costs 2.25 per mile Other costs 680 per product 2. Form an equation for total cost based on the fixed costs and your results from Requirement 1. Enter the sales percent in decimal form, rounded to four decimal places. For example, 62.75% would be entered as 0.6275. Total cost $ 255,000+ 0.31 X (sales) +S 2.25 (miles) +$ 680 (product) 3. The president is considering expanding the restaurant menu and plans to add one new offering to the menu. According to the cost equation, what is the additional monthly cost for the new menu offering? Feedback Check My Work 2. A cost equation can have more than one cost that varies in relation to an activity driver, 3. An example of a menu offering is a new entre such as spaghetti. Account Analysis Method Shitrell Blackthorn is the accountant for several pizza restaurants based in a Uri-city area. The president of the chain wanited some help with budgeting and cost control, so Shirtell decided to analyze the accounts for the past year. She divided the accounts into different categories, depending on whether they appeared to he primarily fixed or to vary with one of three different drivers. Food and wage costs appeared to vary with the total sales dallars. Delivery costs varied with the number of miles driven (workers were required to use their own cars and were reimbursed for miles driven). A group of other costs, including purchasing, materials handling, and purchases of kitchen equipment, dishes, and pans, appeared to vary with the number of different product types (e.g.pl salad, and lasagna). Shirrell came up with the following monthly averages: $175,000 Food and waye costs Delivery costs Other costs Fixed costs Sales revenue $18,000 $9,520 $255,000 $560,000 8,000 Delivery milenge in miles Numbet product types 14 Required: food and winges 1. Calculate the average variable rate for the following costs: food and wages, delivery costs, and other costs. If required, round your answers to two decimal places. Use your rounded answers in subsequent computations it necessary Average Variable Rale 311 X Delivery costs 2.25 per mile Other costs 680 per product 2. Form an equation for total cost based on the fixed costs and your results from Requirement 1. Enter the sales percent in decimal form, rounded to four decimal places. For example, 62.75% would be entered as 0.6275. Tatal cast =$ 255,000 + 0.31 X (sales) +$ 2.25 (miles) +$ 680 (product) 3. The president is considering expanding the restaurant menu and plans to add one new offering to the menu. According to the cost equation, what is the additional monthly cost for the new menu offering? Feedback Check My Work 2. A cost equation can have more than one cost that varies in relation to an activity driver 3. An example of a menu offering is a new entre such as spaghetti