Question
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
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. Angie has gathered the following cost information from the past year:
Month | Labor Hours | Overhead Costs | |||||||
January | 3,500 | $64,870 | |||||||
February | 3,020 | 62,500 | |||||||
March | 3,170 | 63,000 | |||||||
April | 4,340 | 65,900 | |||||||
May | 4,620 | 67,100 | |||||||
June | 5,520 | 73,800 | |||||||
July | 6,570 | 74,700 | |||||||
August | 7,500 | 79,900 | |||||||
September | 7,600 | 81,300 | |||||||
October | 4,600 | 74,000 | |||||||
November | 3,290 | 67,400 | |||||||
December | 6,710 | 73,900 | |||||||
Total | 60,440 | $848,370 |
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, e.g. 12.25 and all other answers to 0 decimal places, e.g. 5,275.)
Variable cost | = | $ | per labor hour |
Fixed cost | = | $ |
Angie has booked 3,200 labor hours for the coming month. How much overhead should she expect to incur? (Round variable cost to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)
Total cost = | $
|
If Angie books one more catering job for the month, requiring 200 labor hours, how much additional overhead should she expect to incur? (Round variable cost to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)
Additional overhead = | $ |
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