Labour Hours Question 2: Cost Behaviour and Profit Planning (16 Marks) John James is the proprietor of Spotfull Catering. The company specialises in providing "in-house" catering for both private and business functions. The catering business is seasonal with a heavy schedule during the summer months and the year-end holidays and a light schedule at other times, The most popular request for catering is for cocktail parties. The company offers a standard cocktail party and has developed the following cost structure on a per person basis: Food and Beverages $17.50 Labour (2.0 hours * $15.00 per how) $30.00 Overhead (2.0 hours * $14.33 per hour) $28.66 $76.16 John James is quite certain about his estimates of the food, beverages and labour costs but is not as comfortable with the overhead estimate. This estimate was based on the actual data for the past 12 months as shown below. This data indicates that overhead expenses vary with labour hours worked. The $14.33 estimate was determined by dividing total overhead expended for the 12 months by total labour hours. Month Overhead Costs July 1.250 $27,500 August 1,350 $29.500 September 1,500 $30,000 October 1.680 $32,000 November 1,920 $33,500 December 2.360 $35,500 January 2,850 $37,000 February 3,560 $38,500 March 3,320 $37.500 April 2,850 $34,000 May 2.120 $31,000 June 3,140 $36,500 Required: 09: Using the High-Low method of cost behaviour analysis, what will be the overhead cost estimate for the coming month where 3,350 direct labour hours are expected to be worked? (Whole Dollars) - (4 marks) Q10: Using regression techniques, what will be the expected overhead cost in the coming month where it is expected that 3,350 hours will be worked? (Whole Dollars) - (4 marks) Q11: John James has been asked to prepare a quote for a 200-person cocktail party to be given next month. Determine the minimum bid price per head that James would be willing to submit to enable him to earn a contribution margin of $20.00 per person assuming that the High-Low cost estimate is used for Product Pricing. (2 Decimal Places) (4 marks) Q12: John James has been asked to prepare a quote for a 200 person cocktail party to be given next month. Determine the minimum bid price per head that James would be willing to submit to enable him to earn a contribution margin of $20.00 per person assuming that the Regression cost estimate is used for Product Pricing. (2 Decimal Places) (4 marks) Labour Hours Question 2: Cost Behaviour and Profit Planning (16 Marks) John James is the proprietor of Spotfull Catering. The company specialises in providing "in-house" catering for both private and business functions. The catering business is seasonal with a heavy schedule during the summer months and the year-end holidays and a light schedule at other times, The most popular request for catering is for cocktail parties. The company offers a standard cocktail party and has developed the following cost structure on a per person basis: Food and Beverages $17.50 Labour (2.0 hours * $15.00 per how) $30.00 Overhead (2.0 hours * $14.33 per hour) $28.66 $76.16 John James is quite certain about his estimates of the food, beverages and labour costs but is not as comfortable with the overhead estimate. This estimate was based on the actual data for the past 12 months as shown below. This data indicates that overhead expenses vary with labour hours worked. The $14.33 estimate was determined by dividing total overhead expended for the 12 months by total labour hours. Month Overhead Costs July 1.250 $27,500 August 1,350 $29.500 September 1,500 $30,000 October 1.680 $32,000 November 1,920 $33,500 December 2.360 $35,500 January 2,850 $37,000 February 3,560 $38,500 March 3,320 $37.500 April 2,850 $34,000 May 2.120 $31,000 June 3,140 $36,500 Required: 09: Using the High-Low method of cost behaviour analysis, what will be the overhead cost estimate for the coming month where 3,350 direct labour hours are expected to be worked? (Whole Dollars) - (4 marks) Q10: Using regression techniques, what will be the expected overhead cost in the coming month where it is expected that 3,350 hours will be worked? (Whole Dollars) - (4 marks) Q11: John James has been asked to prepare a quote for a 200-person cocktail party to be given next month. Determine the minimum bid price per head that James would be willing to submit to enable him to earn a contribution margin of $20.00 per person assuming that the High-Low cost estimate is used for Product Pricing. (2 Decimal Places) (4 marks) Q12: John James has been asked to prepare a quote for a 200 person cocktail party to be given next month. Determine the minimum bid price per head that James would be willing to submit to enable him to earn a contribution margin of $20.00 per person assuming that the Regression cost estimate is used for Product Pricing. (2 Decimal Places) (4 marks)