Cost Behavior Analysis in a Restaurant: High-Low Cost Estimation Assume a Papa John's restaurant has the following information available regarding costs at representative levels of monthly sales:

	Monthly sales in units
	5,000	8,000	10,000
Cost of food sold	$10,000	$16,000	$20,000
Wages and fringe benefits	4,200	4,320	4,400
Fees paid delivery help	1,100	1,760	2,200
Rent on building	1,100	1,100	1,100
Depreciation on equipment	900	900	900
Utilities	800	920	1,000
Supplies (soap, floor wax, etc.)	250	340	400
Administrative costs	1,700	1,700	1,700
Total	$20,050	$27,040	$31,700

Use the high-low method to develop a schedule identifying the amount of each cost that is fixed per month or variable per unit. Total the amounts under each category to develop an equation for total monthly costs.

	Fixed Costs	Variable Costs
Cost of food sold	Answer 1.00 points out of 1.00	Answer 0.00 points out of 1.00
Wages and fringe benefits	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00
Fees paid delivery help	Answer 1.00 points out of 1.00	Answer 0.00 points out of 1.00
Rent on building	Answer 1.00 points out of 1.00	Answer 1.00 points out of 1.00
Depreciation on equipment	Answer 1.00 points out of 1.00	Answer 1.00 points out of 1.00
Utilities	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00
Supplies (soap, floor wax, etc.)	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00
Administrative costs	Answer 1.00 points out of 1.00	Answer 1.00 points out of 1.00
Total costs equation	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00

(c) Predict total costs for a monthly sales volume of 9,800 units. $Answer