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Company X produces dining chairs and tables. The following budget information is available: The company also Item Dining Chairs Tables Total Cost Machine Setups 250
Company X produces dining chairs and tables. The following budget information is available: The company also Item Dining Chairs Tables Total Cost Machine Setups 250 600 TL48,300 Inspections 250 470 TL72,000 Labor Hours 2,300 2,490 envisages a budgeted advertisement cost of $107,000. Q-5) Compute total machine setups and inspection costs assigned to Dining Chairs, using plantwide method if the allocation base is labor hours. Q-6) Compute total machine setups and inspection costs assigned to Tables, using ABC. Q-7) Jane Botosan operates a bed and breakfast hotel in a resort area near Lake Michigan. Depreciation on the hotel is $60,500 per year. Jane employs a maintenance person at an annual salary of $41,000 and a cleaning person at an annual salary of $24,000. Real estate taxes are $10,700 per year. The rooms rent at an average price of $129 per person per night including breakfast. Other costs are laundry and cleaning service at a cost of $10.70 per person per night and the cost of food which is $5.70 per person per night. Jane is considering changing the business strategy. She considers installing additional cleaning machines which will decrease laundry and cleaning service per person per night by $3.30. However, fixed depreciation cost will increase by $4,070. Determine the number of rentals at which Jane would be indifferent between the current and proposed business models
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