Helen and Donald met with the supervisor of the pizza division of a medium-sized Italian food supplier. The supervisor explained the two key costs in his division, as follows. Cost Type Each pizza MOH Number of Units Helen's cost model Donald's cost model 2,900 MOH cost 2,900 Total Although Helen and Donald used this data to estimate a model for the division's costs, they each came up with a different model, as follows. 4 $13,630 $3,770 Total pizza division cost = $4.70 (number of pizzas) + $3,770 Total pizza division cost = $6.00 (number of pizzas) What understanding did Helen have about the cost behavior of these costs?

Helen and Donald met with the supervisor of the pizza division of a medium-sized Italian food supplier. The supervisor explained the two key costs in his division, as follows. Cost Type Each pizza MOH Number of Units Helen's cost model Donald's cost model 2,900 MOH cost 2,900 Total Although Helen and Donald used this data to estimate a model for the division's costs, they each came up with a different model, as follows. 4 $13,630 $3,770 Total pizza division cost = $4.70 (number of pizzas) + $3,770 Total pizza division cost = $6.00 (number of pizzas) What understanding did Helen have about the cost behavior of these costs?

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Description: Helen and Donald met with the supervisor of the pizza division of a medium-sized Italian food supplier. The supervisor explained thetwo key costs in his division, as follows.Cost TypeEach pizzaMOHNumber of UnitsHelen's cost modelDonald's cost model2

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 11EA: Potterii sells its products to large box stores and recently added a retail line of products to sell...

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Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The restaurant's owner wants to better understand his costs and hired a student intern to conduct an activity-based costing study. The Intern identified three activities, completed the first- stage cost allocations and gathered the activity measure data shown below. Activity Cost Pool Serving a party of diners Serving a diner Serving drinks Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Cost $ 18,290 $ 112,840 $ 33,990 Total Activity 5,900 parties 12,400 diners 10,300 drinks The above costs exclude organization-sustaining costs such as rent, property taxes, and top-management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served. Prior to the activity-based…
Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The restaurant's owner wants to better understand his costs and hired a student intern to conduct an activity-based costing study. The intern identified three activities, completed the first- stage cost allocations and gathered the activity measure data shown below. Activity Cost Pool Serving a party of diners Serving a diner Serving drinks Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Cost $ 11,130 $ 104,490 $ 23,690 Total Activity 5,300 parties 12,900 diners 10,300 drinks The above costs exclude organization-sustaining costs such as rent, property taxes, and top-management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served. Prior to the activity-based…