Chapter 9, Question 2 Tutti's Sandwich Shop has the following information regarding costs at various levels of monthly sales. Help Tutti separate her costs into fixed costs and variable costs so that she can predict and evaluate her costs at varying levels guests served. Hint: Remember to use the high/low method for all mixed costs. See p. 341-343 for reference. January ($) February ($) March ($) Guests Served 12,000 17,000 21,000 Cost of Sales (Food Cost) 9.000 16,000 18,000 Salaries, Wages, And Benefits 11,100 14,000 14,500 Telephone 6,500 8,500 7,000 Rent on Building 3,600 3,600 3,600 Depreciation of Equipment 750 750 750 Utilities 1,100 1,500 1,700 Maintenance and Repairs 650 380 920 Administrative Costs 3,000 3,000 3,000 Item Variable Cost per Guest Fixed Costs Cost of Sales (Food Cost) 0 Salaries, Wages, And Benefits 14,000 Telephone 6,750 Rent on Building Depreciation of Equipment Utilities 500 Maintenance and Repairs Administrative Costs Total Develop a total cost equation for Tutti that she can use at any volume of sales. a. Total Costs = Fixed Costs + (Variable cost per guest x |Number of guests) Total Costs = X Determine if Tutti is controlling her costs in April as well as she did in January, February, and March. She sold sandwiches to 30,000 guests in April. Calculate her expected costs based on her actual number of guests by filling in the total cost equation below: Total Costs = Fixed Costs + (Variable cost per guest x |Number of guests) 30,000 Her actual total costs in April were $81,500. Were her actual costs in April higher or lower than expected based on her total cost equation, and was this a favorable or unfavorable variance? C. Results Higher Lower Favorable Unfavorbale Were actual costs higher or lower than expected? Were actual costs favorable or unfavorable