Question
Trumball Catering served 4,000 meals last month. Trumball recorded the following costs with those meals: Variable costs: Ingredients used $ 10,200 Direct labor 22,500 Indirect
Trumball Catering served 4,000 meals last month. Trumball recorded the following costs with those meals:
Variable costs: Ingredients used $ 10,200
Direct labor 22,500
Indirect materials and supplies 9,300
Utilities 3,600
Depreciation on trucks and equipment (straight-line, unit basis) 6,200 Fixed costs:
Managers' salaries $ 28,700
Rent 14,200
Depreciation on equipment (straight-line, time basis) 7,600
Miscellaneous fixed costs 3,500
Required:
Trumball expects to serve 30 percent more meals in the next month. Unit variable costs are expected to remain unchanged. The controller at Trumball knows that if the business caters over 5,000 meals in a month, the company must hire an additional manager (part-time) at a cost of $3,195 for the month. Miscellaneous fixed costs are expected to increase by 15 percent. Calculate the unit cost and the total cost if expectations for costs and volume are met next month. Note: Round "Unit costs" answer to 2 decimal places.
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