Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sophia's Restaurant served 5,000 meals last quarter. Sophia recorded the following costs with those meals. Variable costs: Ingredients used $ 14,000 Direct labor 10,500 Indirect

Sophia's Restaurant served 5,000 meals last quarter. Sophia recorded the following costs with those meals.

Variable costs:
Ingredients used $ 14,000
Direct labor 10,500
Indirect materials and supplies 5,300
Utilities 1,700
Fixed costs:
Managers' salaries 22,000
Rent 18,000
Depreciation on equipment (straight-line, time basis) 2,000
Other costs 3,000

Required:

Suppose that Sophia expects to serve 15 percent more meals in the next quarter. Unit variable costs are expected to remain unchanged. However, Sophia knows that if the restaurant serves over 5,500 meals in a quarter, she must hire an additional manager (part-time) at a cost of $6,450 for the quarter. Other fixed costs are expected to increase by 10 percent.

Calculate the unit cost and the total cost if 5,750 meals are served next quarter. (Round "Unit costs" answer to 2 decimal places.)

Sophia's Restaurant served 5,000 meals last quarter. Sophia recorded the following costs with those meals.

Variable costs:
Ingredients used $ 14,000
Direct labor 10,500
Indirect materials and supplies 5,300
Utilities 1,700
Fixed costs:
Managers' salaries 22,000
Rent 18,000
Depreciation on equipment (straight-line, time basis) 2,000
Other costs 3,000

Required:

Suppose that Sophia expects to serve 15 percent more meals in the next quarter. Unit variable costs are expected to remain unchanged. However, Sophia knows that if the restaurant serves over 5,500 meals in a quarter, she must hire an additional manager (part-time) at a cost of $6,450 for the quarter. Other fixed costs are expected to increase by 10 percent.

Calculate the unit cost and the total cost if 5,750 meals are served next quarter. (Round "Unit costs" answer to 2 decimal places.)

Total variable costs

Total Fixed costs

Total costs

Unit costs

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

More Books

Students also viewed these Accounting questions

Question

What does Contract A refer to in a tendering context?

Answered: 1 week ago