Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Focused Value Streams, Product CostingSixty employees ( all CPAs ) of a local public accounting firm eat lunch at least twice weekly at a very

Focused Value Streams, Product CostingSixty employees (all CPAs) of a local public accounting firm eat lunch at least twice weekly at a very popular pizza restaurant. The pizza restaurant recently began offering discounts for groups of 15 or more. Groups would be seated in a separate room, served individual bow salad costing $2 each, pitchers of root beer costing $3 each (each pitcher has a five-glass capacity), and medium, two-topping pizzas for $1(10 slices each). The food would have to be ordered in advance.Thirty of the CPAs commit to eating three slices of pizza, three glasses of root beer, and one bowl of salad [a consumption pattern of (3,3,1)] The other 30 are more hearty eaters and commit to seven slices of pizza, two glasses of root beer, and one bowl of salad [a consumption) pattern of (7,2,1)]. Each member of the group must pay an assessed amount for the lunch.Required:1. Determine the total number of pizzas, pitchers of root beer, and salads that must be ordered for the 60 employees.Pizza30pizzasRoot beer30pitchersSalads60bowls1. One of the CAs offered to determine the amount that each should pay. He suggested that the easiest way is to assign the average cost to each person eating in the group. Based on this suggestion, how much would each CPA pay for lunch? Round your answer to the nearest cent.8.50per individual2.3. One of the CPAs offered to determine the amount that each should pay. He suggested that the easiest way Is to assign the average cost to each person eating in the group. Based on this suggestion, how much would each CPA pay for lunch? Round your answer to the nearest cent8.50per individual4. One CPA objected to using average cost, noting that half of the CPAs are much lighter eaters than the other half. Based on the large differences in consumption behaviors, he suggested forming two groups: one for the light eaters (Group A) and one for the heavier eaters (Group B). Calculate the average lunch cost for each CPA for each group. Round your answers to the nearest cent.Group A6.80per individualGroup B$10.20per individualCalculate the cost for each CPA that would be assigned using ABC.Group A6.80per individualGroup B9.40per individualWhat does this tell you?
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: John Hoggett, Lew Edwards, John Medlin

6th Edition

0470806583, 978-0470806586

More Books

Students also viewed these Accounting questions

Question

How can evaluation of LMD become more than an act of faith?

Answered: 1 week ago