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Cost Behavior Analysis in a Restaurant: High-Low Cost Estimation Assume a Papa John's restaurant has the following information available regarding costs at representative levels of monthly sales: Monthly sales in units 5,000 8,000 10,000 Cost of food sold $10,000 $16,000 $20,000 Wages and fringe benefits 4,200 4,320 4,400 Fees paid delivery help 1,200 1,920 2,400 Rent on building 1,300 1,300 1,300 Depreciation on equipment 500 500 500 Utilities 800 920 1,000 Supplies (soap, floor wax, etc.) 200 260 300 Administrative costs 1,600 1,600 1,600 Total $19,800 $26,820 $31,500 (a) Identify each cost as being variable, fixed, or mixed. Cost of food sold Variable Wages and fringe benefits Mixed Fees paid delivery help Variable Rent on building Fixed Depreciation on equipment Fixed Utilities Mixed Supplies (soap, floor wax, etc.) Mixed Administrative costs Fixed (b) Use the high-low method to develop a schedule identifying the amount of each cost that is fixed per month or variable per unit. Total the amounts under each category to develop an equation for total monthly costs. Round variable cost answers to two decimal places. Fixed Costs Variable Costs Cost of food sold 0 $ 2X Wages and fringe benefits 4,000 0.04 X Fees paid delivery help 0 0.12 X X Rent on building 1,300 0 X Depreciation on equipment 500 OX Utilities 600 0.04 X Supplies (soap, floor wax, etc.) 100 0.01 x x Administrative costs 1,600 0 x Total costs equation $ 8,100 $ 2.21 X X (c) Predict total costs for a monthly sales volume of 9,100 units. 28,211 X