Refer to the information for Speedy Pete's on the previous page. Assume that this information was used

Question:

Refer to the information for Speedy Pete's on the previous page. Assume that this information was used to construct the following formula for monthly delivery cost.

Total Delivery Cost = $41,850 + ($12.00 × Number of Deliveries)

Speedy Pete's is a small start-up company that delivers high-end coffee drinks to large metropolitan office buildings via a cutting-edge motorized coffee cart to compete with other premium coffee shops. Data for the past 8 months were collected as follows:

Month Delivery Cost Number of Deliveries

May.....................$63,450.............................1,800

June.......................67,120.............................2,010

July.......................66,990.............................2,175

August...................68,020.............................2,200

September...............73,400.............................2,550

October..................72,850.............................2,630

November...............75,450.............................2,800

December...............73,300.............................2,725

Required:

Assume that 3,000 deliveries are budgeted for the coming year. Use the total delivery cost formula to make the following calculations:

1. Calculate total variable delivery cost for the coming year.

2. Calculate total fixed delivery cost for the year.

3. Calculate total delivery cost for the year.

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Related Book For  book-img-for-question

Managerial Accounting The Cornerstone of Business Decision Making

ISBN: 978-1337115773

7th edition

Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

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