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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

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 1,200 1,920 2,400
Rent on building 1,300 1,300 1,300
Depreciation on equipment 500 500 500
Utilities 800 920 1,000
Supplies (soap, floor wax, etc.) 200 260 300
Administrative costs 1,600 1,600 1,600
Total $19,800 $26,820 $31,500

(A) 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.

Round variable cost answers to two decimal places.

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

(B) Predict total costs for a monthly sales volume of 9,100 units.

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