Question
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
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