A service company reviews its operational costs for five different services over three months Month Services Rendered Total Cost M Cost per Service M Total Cost N Cost per Service N Total Cost O Cost per Service O Total Cost P Cost per Service P Total Cost Q Cost per Service Q 1 100 $500 $700 $600 $1,000 $800 2 200 $500 $900 $1,200 $1,800 $1,600 3 50 $500 $500 $300 $500 $400 Required a Determine the cost per service for each cost b Classify each cost as fixed, variable, or mixed c Analyze the impact of each cost behavior on the companys pricing strategy d Discuss the implications of cost behavior for service capacity planning e Recommend strategies to manage each type of cost effectively

Question: A service company reviews its operational costs for five different services over three months. Month Services Rendered Total Cost M Cost per Service M Total

A service company reviews its operational costs for five different services over three months.

Month	Services Rendered	Total Cost M	Total Cost N	Total Cost O	Total Cost P	Total Cost Q
1	100	$500	$700	$600	$1,000	$800
2	200	$500	$900	$1,200	$1,800	$1,600
3	50	$500	$500	$300	$500	$400

Required: a. Determine the cost per service for each cost. b. Classify each cost as fixed, variable, or mixed. c. Analyze the impact of each cost behavior on the company’s pricing strategy. d. Discuss the implications of cost behavior for service capacity planning. e. Recommend strategies to manage each type of cost effectively.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Solution Lets tackle each part of the question step by step a Determine the cost per service for each cost To determine the cost per service we divide the Total Cost by the number of Services Rendered ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Great Adventures Company, Inc., specializes in supplies, gears and equipment for sports and outdoor adventures. The products it sells range from tennis balls, gloves to skiing gears, and off-road...

4. In January, the company received $45,000 in cash from customers who bought merchandizes last year. The remaining $30,000 was received in February. 5. On January 28 , the company paid its suppliers...

create an adjusted and unadjusted trial balance chart balance sheet and income statement Great Adventures Company, Inc,, specializes in supplies, gears and equipment for sports and outdoor...

Where are the GAAP issues within the attached Notes and Financial Statements? Client Acceptance and Planning Using the client's notes to the financial statements, determine what issues relating to...

Client Acceptance and Planning Using the clients notes to the financial statements, determine what issues relating to GAAP to which the predecessor auditor may be referring. ABC, Inc. NOTES TO...

JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 2017 76,450 25,439...

Calculate valuations for the company Vampr using the scorecard and VC methods. part one is cut off but it is the scorecard method. All information needed is provided. there is no more information to...

Return Predictability along the Supply Chain F.AJ inancial Analysts Journal Volume 66 . Number 3 @2010 CFA Institute these two studies were based on the idea that the 2007, the last month for which...

Please help me with the following assignments. Please answer all assignments and highlight answers. Upon completion there will be a tip added. Thank you. ACCOUNTING - Tenth Edition Solutions Manual...

JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS Al December 30, 2018 and Deerber 31, 2017 (Dollars in Millions Except Share and Per Share Anul Note 1) Cash and cash equivalents (Notes...

A large coil of radius R1 and having N1 turns is coaxial with a small coil of radius R2 and having N2 turns. The centers of the coils are separated by a distance x that is much larger than R1 and R2....

Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and Commercial. Both divisions invest heavily in R&D, which is assumed to benefit five years. R&D...

Evaluate the indefinite integral. Z dx x 2 x 2 + 4 9 = + C .

Managerial accounting applies to each of the following types of businesses except A) Service firms. B) Merchandising firms. C) Manufacturing firms. D) Managerial accounting applies to all types of...

Find the z value in each of the following cases, (a) P[Z z] = .10 (c) P[-z

Consider Devine Fashion from S8-6. Assume once again that all fixed costs are unavoidable. If the company discontinues one of the current departments, it plans to replace the discontinued department...

McNulty, Inc. produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot earn a margin on sales of at least 20 percent, it will be dropped. The...

A university found that 20% of its students withdraw without completing the introductory statistics course. Assume that 20 students registered for the course. a. Compute the probability that 2 or...

Create a 200 word summary on the Juvenile Justice System than and today. Describe The Juvenile system and provide a generalizable definition. Highlight the issues in the Juvenile system and why this...

Why is cash flow important in implementing strategy?

How may a growth strategy be financed? What are the advantages and disadvantages of each option?

How are the action plans for a division (for example, the hospital division) similar to action plans for a department (such as housekeeping)? How are they different?