Refer to problem 30. a. Indicate the information in addition to that provided in problem 30 required
Question:
Refer to problem 30.
a. Indicate the information in addition to that provided in problem 30 required to perform account analysis.
b. Now assume that Peterson’s Catering Company had the following breakdown of costs for the 16 months reported in problem 30:
Total costs of meals produced ................................................... $334,368
Total costs for delivering ............................................................ 164,400
Total costs of VIP services ......................................................... 140,352
Total costs of developing new customers.................................... 154,904
Total costs of developing new products...................................... 18,700
Total facilities-level costs (total for all 16 months)..................... 159,377
Total costs................................................................................... $972,101
What are the cost driver rates for?
(1) Meals produced,
(2) Deliveries,
(3) VIP services,
(4) New customers, and
(5) New products developed using account analysis?
c. What are the estimated costs for a month assuming the following level of cost driver volumes? (Don’t forget to include the facilities-level costs in your estimate.)
12,000.............................................................Meals produced
1,100...............................................................Deliveries
300.................................................................. VIP services
5...................................................................... New customers
2...................................................................... New products
d. Peterson’s Catering Company is considering outsourcing deliveries. Compared to your answer in requirement c., how much would the company save by outsourcing the delivery service (before considering the cost of outsourcing)?
Step by Step Answer:
Managerial Accounting An Introduction to Concepts Methods and Uses
ISBN: 978-0324639766
10th Edition
Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil