F H A B D E 1 Cost Behavior 2 3 4 Assume a local pizzeria reported the following results for October and November 5 October November 6 Unit Sales 8,000 12,000 7 8 Cost of Food Sold $ 160,000 $ 240,000 9 Wages and Salaries 30,000 30,000 10 Rent 8,000 8,000 11 Depreciation 5,000 5,000 12 Utilities 2,800 3,000 13 Supplies 2.000 3,000 14 Total $ 207,800 $ 289,000 15 16 a. Identify each cost as being fixed, variable or mixed. 17 b. Determine the equation for total operating costs (Fixed + Unit Variable Cost #of sandwiches) 18 c. Predict the total operating costs for 15000 pizzas 19 d. Determine the average costs for 15000 pizzas 20 21 Concept question: Why are fixed costs generally not relevant for decision-making? 22 Would average costs be useful for decision-making and why or why not? 23 24 Concept Question: 25 26 27 28 29 30 31 32