Question
Jackson Company operates a cafeteria for its employees. The number of meals served each week over the last seven weeks, along with the total costs
Jackson Company operates a cafeteria for its employees. The number of meals served each week over the last seven weeks, along with the total costs of operating the cafeteria are given below: Week Meals Served Cafeteria Costs 1 1,500 $4,800 2 1,600 $5,080 3 1,800 $5,280 4 1,450 $4,900 5 1,200 $4,000 6 1,650 $5,100 7 1,900 $5,400 Assume that the relevant range includes all of the activity levels mentioned in this problem.
Required: (a) Using the high-low method of analysis, calculate the variable cost per meal served for cafeteria costs.
(b) Calculate the fixed cost of the cafeteria.
(c) Construct a cost formula for total cafeteria costs.
(d) Estimate the total cafeteria costs to be incurred by Jackson Company if 2,000 meals are served.
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