Sugar Magnolia Company operates a cafeteria for its employees. The number of meals served each week over the last seven weeks, along with the total costs of operating the cafeteria are given below: Meals Served Cafeteria Costs Week 1 1,625 $5,080 Week 2 1,325 $3,980 Week 3 1,550 $4,940 Week 4 1,400 $4,700 Week 5 1,650 $5,100 Week 6 1,800 $5,380 Week 7 1,975 $5,540 Week 8 2,000 $5,640 Assume that the relevant range includes all of the activity levels mentioned in this problem. Using the high-low method: the variable cost per meal served in the cafeteria would be estimated to be: $_____________________________ b.) the estimated fixed cost per week is: $______________________________
Sugar Magnolia Company operates a cafeteria for its employees. The number of meals served each week over the last seven weeks, along with the total costs of operating the cafeteria are given below: Meals Served Cafeteria Costs Week 1 1,625 $5,080 Week 2 1,325 $3,980 Week 3 1,550 $4,940 Week 4 1,400 $4,700 Week 5 1,650 $5,100 Week 6 1,800 $5,380 Week 7 1,975 $5,540 Week 8 2,000 $5,640 Assume that the relevant range includes all of the activity levels mentioned in this problem. Using the high-low method: the variable cost per meal served in the cafeteria would be estimated to be: $_____________________________ b.) the estimated fixed cost per week is: $______________________________
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sugar Magnolia Company operates a cafeteria for its employees. The number of meals served each week over the last seven weeks, along with the total costs of operating the cafeteria are given below:
|
|
Meals Served |
Cafeteria Costs |
|
Week 1 |
1,625 |
$5,080 |
|
Week 2 |
1,325 |
$3,980 |
|
Week 3 |
1,550 |
$4,940 |
|
Week 4 |
1,400 |
$4,700 |
|
Week 5 |
1,650 |
$5,100 |
|
Week 6 |
1,800 |
$5,380 |
|
Week 7 |
1,975 |
$5,540 |
|
Week 8 |
2,000 |
$5,640 |
Assume that the relevant range includes all of the activity levels mentioned in this problem.
Using the high-low method:
- the variable cost per meal served in the cafeteria would be estimated to be:
$_____________________________
b.) the estimated fixed cost per week is:
$______________________________
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