Rosie's is a luncheonette in the traditional sense of the word. Customers can eat at Rosie's by waiting for a seat at the counter (there are seven seats available) or order food for pickup. Rosie's only accepts-as in currency-no debit or credit cards and absolutely no checks! Rosie's is open for breakfast and lunch from 6:00am to 2:30 pm. Rosie's is closed Sundays but open all other days. Some facts: Rosie's sells a homemade chicken soup which is the toast of the town". The chicken used in the soup i primarily the chicken that has been cooked for chicken sandwiches, but which remains unsold at the end of the day. This chicken (refrigerated and safe) is ground and placed in a broth along with vegetables, noodles, and other condiments and spices. On average on any given day, 80% of the chicken used in the soup consists of the leftover cooked chicken from the prior day. The remaining 20% consists of fresh chicken cooked for the soup then added. On most days, all the chicken soup is sold, and remaining soup is either eaten by the staffor, at the end of the day, discarded. Rosie's "secret" family recipe for five gallons of soup is as follows: MATERIAL ITEMS: Six gallons of filtered water Three pounds of chicken, breasts and thighs, ground One pound of carrots Five stalks of celery, chopped COST 51.00 per five-gallon jug 5.69 per pound for thighs; $99 for breasts; the ratio of breast to thigh meat is approx. 2.1: two pounds of breast meat to one pound of thigh meat. $39/ pound 5.79 per stalk, average eight stalks per bunch $1.00 for a 36 oz. bag of noodles $2.00 per pound about $.15 each about $.50 Three cups of dried egg noodles One ounce of seasoning Salt and pepper Condiments (msc. Seasonings) Packaging (for to go orders): 8 oz container with lid S.75 for both Rosie's is a luncheonette in the traditional sense of the word. Customers can eat at Rosie's by waiting for a seat at the counter (there are seven seats available) or order food for pickup. Rosie's only accepts-as in currency-no debit or credit cards and absolutely no checks! Rosie's is open for breakfast and lunch from 6:00am to 2:30 pm. Rosie's is closed Sundays but open all other days. Some facts: Rosie's sells a homemade chicken soup which is the "toast of the town". The chicken used in the soup is primarily the chicken that has been cooked for chicken sandwiches, but which remains unsold at the end of the day. This chicken (refrigerated and safe) is ground and placed in a broth along with vegetables, noodles, and other condiments and spices. On average on any given day, 80% of the chicken used in the soup consists of the leftover cooked chicken from the prior day. The remaining 20% consists of fresh chicken cooked for the soup then added. On most days, all the chicken soup is sold, and remaining soup is either eaten by the staff or, at the end of the day, discarded. Rosie's "secret" family recipe for five gallons of soup is as follows: MATERIAL ITEMS: Six gallons of filtered water Three pounds of chicken, breasts and thighs, ground One pound of carrots Five stalks of celery, chopped COST $1.00 per five-gallon jug 5.69 per pound for thighs; $99 for breasts; the ratio of breast to thigh meat is approx. 2:1: two pounds of breast meat to one pound of thigh meat. 539/ pound 5.79 per stalk, average eight stalks per bunch $1.00 for a 36 oz. bag of noodles $2.00 per pound about $.15 each about $.50 Three cups of dried egg noodles One ounce of seasoning Salt and pepper Condiments (msc. Seasonings) Packaging (for to go orders): 8 oz container with lid 5.75 for both Spoons & napkins average $.25 per order (whether take out or eat-in) 5.90 for both 12 oz container with lid LABOR Time to grind chicken Time to chop celery Time to chop carrots Time to cook the chicken Packing time Time to assemble ingredients and put in soup Time to reorder groceries Time to count inventory and determine needs for following week Counter staff (for serving eat-in customers) Cleaning work To-go time Time to complete accounting and tax requirements 15 minutes for five pounds 15 minutes for whole bunch 10 minutes per pound 20 minutes total average 5 minutes 15 minutes per batch (5 gallons) 1 hour per week 2 hours per week 15 minutes per customer 2.5 hours per day 10 minutes per order 3-5 hours per week OVERHEAD Utilities Rent on building Depreciation of kitchen equipment Depreciation of office equipment $800 per month $3,200/month 5700/month $1,000/month Other info: The building which houses the restaurant consists of two floors with the restaurant and storeroom on the first level and an office and office storage area on the second level. The square footage is 2,000 for the upper-level office and 100 for the storage area; the square footage for the lower level is 1,800 for the restaurant and 700 for the storeroom. There are three workers: Rosie, who takes a salary of $5,000 per month and two worker paid $20/hour. Rosie orders the groceries and takes inventory. The two hourly employees serve the customers, pack the soup, prep the ingredients for the soup, cook the chicken, and clean up. Rosie makes the soup and oversees the restaurant. Rosie is also the cashier. The hourly workers work 40 hour weeks. Rosie's sells the Boz cup of soup for $3.99 and the 12 oz for $5.49. On average Rosie sells 5,500 cups of soup a month: 3,000 of the 8 oz and 2,500 of the 12 oz. Rosie's has the capacity to make 6,000 cups of soup a month-in the same ratio as noted here (3,000:2,500). REQUIREMENTS: 1. CLASSIFY each of the above cost items as a) direct or indirect and b) as product or period costs 2. What is the full product cost for a) and 8 oz cup and b) a 12 oz cup 3. What is the breakeven point in DOLLARS for Rosie's 4. What is the breakeven point in UNITS for Rosie's 5. What is the cost equation for Rosie's 6. Assume that Rosie's hourly workers went on vacation and Rosie hired temporary workers at $25/hour. What is the labor price/rate variance assuming each worker worked 100 hours in the month. 7. A nearby restaurant (which doesn't compete with Rosie's) has offered to buy 2,000 8 oz cups of soup for $3.00 a cup. Should Rosie accept the offer? 8. What is Rosie's operating income for an average month (without the special order) under a) absorption costing b) variable costing. Assume there is no beginning or ending inventory