Refer to the data in Exercise 2-48. Variable costs: Ingredients used ...............................$14,000 Direct labor ..........................................10,500 Indirect materials

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Refer to the data in Exercise 2-48.

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 fixed 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.

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Related Book For  answer-question

Fundamentals of Cost Accounting

ISBN: 978-1259969478

6th edition

Authors: William N. Lanen, Shannon Anderson, Michael W Maher

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