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PART 3.2 (10 Baboo Lall operates a hotdog stand in Brooklyn Mall, Pretoria. Each hotdog sells for R15. The total cost of direct materials (the
PART 3.2 (10 Baboo Lall operates a hotdog stand in Brooklyn Mall, Pretoria. Each hotdog sells for R15. The total cost of direct materials (the bread roll, sausage, condiment and wrapper) is R4 per hotdog. Rental for the hotdog stand amounts to R12 000 per month. Fixed wages of employees amount to R16 000 per month. Other overhead costs and sales units for the last three months were as follows: Number of hotdogs sold Units 2 850 3 000 3 550 Total overhead cost January February March 5 550 5 800 6 390 Sales for April is expected to be 3 500 hotdogs. REQUIRED: 3.2.1 Use the high-low method to calculate the fixed and variable costs of the other overhead 3.2.2 Calculate the expected profit of Baboo's hotdog stand for April. Use the following format (5) costs to answer this question: Total sales Less: Variable costs Less: Fixed cost Profit (17]
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