Managerial Accounting
16th Edition
ISBN: 9781259995484
Author: Ray Garrison
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 1, Problem 4E
EXERCISE 1−4 Fixed and Variable Cost Behavior LO1−4
Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,200 and the variable cost per cup of coffee served is $0.22.
Required:
- Fill in the following table with your estimates of the company's total cost and average cost per cup of coffee at the indicated levels of activity. Round off the average cost per cup of coffee to the nearest tenth of a cent.
Cups of Coffee Served in a Week | |||
2,000 | 2,100 | 2,200 | |
Fixed cost | ? | ? | ? |
Variable cost | ? | ? | ? |
Total cost | ? | ? | ? |
Average cost per cup of coffee served | ? | ? | ? |
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Exercise 1-4 (Algo) Fixed and Variable Cost Behavior [LO1-4]
Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is
$1,800 and the variable cost per cup of coffee served is $0.33.
Required:
1. Fill in the following table with your estimates of the company's total cost and average cost per cup of coffee at the Indicated levels of
activity.
2. Does the average cost per cup of coffee served Increase, decrease, or remain the same as the number of cups of coffee served in a
week Increases?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Fill in the following table with your estimates of the company's total cost and average cost per cup of coffee at the indicated
levels of activity. (Round the "Average cost per cup of coffee served" to 3 decimal places.)
Fixed cost
Variable cost
Total cost
Average cost per cup of coffee served
2,100 Cups of 2,200 Cups of
Coffee
Coffee
Exercise 1-4 (Algo) Fixed and Variable Cost Behavior [LO1-4]
Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a
coffee stand is $1,900 and the variable cost per cup of coffee served is $0.37.
Required:
1. Fill in the following table with your estimates of the company's total cost and average cost per cup of coffee at the
indicated levels of activity.
2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee
served in a week increases?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Fill in the following table with your estimates of the company's total cost and average cost per cup of coffee at the indicated
levels of activity. (Round the "Average cost per cup of coffee served" to 3 decimal places.)
Fixed cost
Variable cost
Total cost
Average cost per cup of coffee served
Cups of Coffee Served in a Week
2,500
2,400
2,600
Cost Classification and Estimation
Problem 22: Cost Behavior
Starbucks operates a number of branches in Metro Manila. The fixed monthly
expense of a coffee branch is P200,000 and the variable cost per cup of coffee is
P20.
Cups of Coffee Sold
52,500
50,000
55,000
Fixed Cost
Variable cost
Total cost
Cost per cup of coffee
Required: Fill in the missing amounts with your estimates of total costs and
cost per cup of coffee.
Chapter 1 Solutions
Managerial Accounting
Ch. 1.A - EXERCISE 1A1 Cost of Quality Terms LO17, LO18 A...Ch. 1.A - EXERCISE 1A2 Classification of Quality Costs LO17...Ch. 1.A - Prob. 3PCh. 1.A - PROBLEM 1A4 Quality Cost Report LO17, LO18 page 66...Ch. 1 - Prob. 1QCh. 1 - Define the following: (a) direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - Prob. 5QCh. 1 - Define the following terms: (a) cost behavior and...
Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Managers often assume a strictly linear...Ch. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...Ch. 1 - What is the difference between a traditional...Ch. 1 - Prob. 12QCh. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 1AECh. 1 - Prob. 2AECh. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - L012, L013, L014, L015, L016 Martinez Company’s...Ch. 1 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 1 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - EXERCISE 1—1 Identifying Direct and Indirect Costs...Ch. 1 - EXERCISE 1-2 Classifying Manufacturing Costs LO1-2...Ch. 1 - EXERCISE 1-3 Classifying Costs as Product or...Ch. 1 - EXERCISE 14 Fixed and Variable Cost Behavior LO14...Ch. 1 - Prob. 5ECh. 1 - EXERCISE 1—6 Traditional and Contribution Format...Ch. 1 - Prob. 7ECh. 1 - EXERCISE 18 Product Costs and Period Costs;...Ch. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - EXERCISE 1—11 Cost Behavior; Contribution Format...Ch. 1 - EXERCISE 1-12 Product and Period Cost Flows LO1–3...Ch. 1 - Prob. 13ECh. 1 - EXERCISE 1-14 Cost Classification 1O1–2, LO1–3,...Ch. 1 - Prob. 15ECh. 1 - EXERCISE 1–16 Cost Classifications for Decision...Ch. 1 - EXERCISE 1-17 Classifying Variable and Fixed Costs...Ch. 1 - PROBLEM 1-18 Direct and Indirect Costs; variable...Ch. 1 - PROBLEM 1-19 Traditional and Contribution Format...Ch. 1 - PROBLEM 120 Variable and Fixed Costs; Subtleties...Ch. 1 - Prob. 21PCh. 1 - Prob. 22PCh. 1 - PROBLEM 123 Cost Classification LO11, LO13, LO14...Ch. 1 - PROBLEM 1-24 Different Cost Classifications for...Ch. 1 - Prob. 25PCh. 1 - CASE 1-26 Cost Classification and Cost Behavior...Ch. 1 - Prob. 27C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Activity Rate Travel Deliveries $2 per mile driven. $ 50 per delivery $ 22 per phone call Customer service Two of the company's many customers include Customer A and Customer B. These two customers consumed the company's activities as follows: Total Expected Activity Customer A Customer B 250 5 12 Activity Cost Pool Travel (number of miles driven) Deliveries (number of deliveries) Customer service (number of phone calls) How much cost would be assigned from the Travel activity to Customer A? Multiple Choice $170 $60 $680 340 15 20arrow_forwardQuestion 4 Auto Tires, Inc. sells tires to service stations for an average of $145 each. The variable costs of each tire is $85 and monthly fixed manufacturing costs total $45,000. Other monthly fixed costs of the company total $15,000. Note: No need to enter comma between number Required: 1. What is the break-even level in tires? 2. What is the margin of safety, assuming sales total $190,000? 3. What is the break-even level in tires, assuming variable costs increase by 20 percent and selling price increase by 17 per unit ? 4. What is the break-even level in tires, assuming the selling price goes up by 20 percent, fixed manufacturing costs decline by 10 percent and other fixed costs decline by $1500and variable cost decrease by 1 per unit ?arrow_forwardab. ock esc ~ Microhard produces tablets, laptops and televisions. Microhard typically sells 1,000 tablets a year. The tablet information is as follows: Selling price per unit Direct material cost per unit Direct labor cost per unit Total unavoidable allocated overhead How much would Operating Income decrease if Microhard were to eliminate the tablets? DO NOT INCLUDE PARENTHESES OR NEGATIVE SIGNS IN YOUR ANSWER. Click Save and Submit to save and submit. Click Save All Answers to save all answers. ! 1 Q A @ 2 W S $60 $30 $10 $48,000 #M 3 E $ 4 D R % от оро 5 F MacBook Pro < 6 T G & of r 7 Y H * 00 つarrow_forward
- Problem 1 Xpress Corp. operates a fast food restaurant in San Fernando. Meals cost an average of $36 for which Xpress incurs variable costs of $14.40. Total fixed costs are $29,160. Required: a) Determine break even in units (persons) and sales dollars using the contribution margin technique. b) If the expected revenue is $ 65,000, what is Xpress' margin of safety ratio? c) If Xpress wants to earn a target income of $20,000, calculate the number of meals necessary.arrow_forwardComplete the product mix analysis to determine the contribution margin per machine hour. Containers Plus Product Mix Analysis Regular Large Sales price per unit Variable cost per unit Contribution margin per unit Units per machine hour Contribution margin per machine hour Which product should Containers Plus emphasize? Why? Containers Plus should emphasize the production of V because this product has the higher Requirement 2. To maximize profits, how many of each size bin should Containers Plus produce? (Enter a "0" for any zero amounts.) Containers Plus should spend machine hours making regular size bins, and machine hours making large size bins. Requirement 3. Given this product mix, what will the company's operating income be? Number of regular size bins per period Contribution margin per regular size bin Total contribution margin Fixed costs Operating incomearrow_forwardSelling price per unit Variable cost per unit Board feet per unit Monthly demand Chairs $80 $30 2 600 Tables $400 $200 a. 500 chairs and 100 tables b. 600 chairs and 80 tables c. 500 chairs and 80 tables d. 600 chairs and 100 tables 10 100 The company's supplier of hardwood will only be able to supply 2,000 board feet this month. What plan would maximize profits?arrow_forward
- 3 OPTIMAL PRICING TO MAXIMIZE PROFIT The Calculus Canned Corn Company's production facility has a weekly overhead cost of $1000 with a unit cost of producing each can of $0.66 plus the cost of the can itself (from part 2). 1. Find the total cost C(D) in dollars of producing D cans of sauce. Cost of can 19 lo cents. 2. Use previously-determined information to find C(p), the total cost in dollars to produce enough cans to satisfy demand when the price is p dollars. (That is, replace D with an expression in terms of price.) 3. Profit is the defined as Revenue minus Cost. Find the total profit P(p) in dollars as a function of the unit price p in dollars. It is a good idea to use parentheses in order to avoid a sign error 4. Use technology and calculus to determine the price at which profit is maximized and the profit that will be attained. There are multiple correct methods. Explain/show your approach and results in the space below.arrow_forwardcost accounting quiz chapter 5 (1) - Windows Photo Viewer File Print E-mail Burn - Open - Olyphant, Inc. has provided the following data: Sales price Sales Fixed cost Variable cost $200 per unit 6,000 units $300,000 $100 per unit If the dollar contribution margin per unit is increased by 10%, total fixed cost is decreased by 20%, and all other factors remain the same, which is the expected change in net operating income? A decrease of $60,000 An increase of $60,000 An increase of $120,000 An increase of $420,000 Page 1 of 4 48 F Sunny = here to search 4いBしCCEarrow_forward-/1 View Policies Current Attempt in Progress Bramble Corp. sells two types of computer hard drives. The sales mix is 30% ( Q-Drive ) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $60 and a selling price of $120. Q-Drive Plus has variable costs per unit of $90 and a selling price of $180. The weighted-average unit contribution margin for Bramble is O $120. O $60.0. O $81. O $69.0. TAvthaalkand iadis hparrow_forward
- QUESTION 2 Luna Sea Sushi, Inc. has total costs of $120,000 when it sells 40,000 units. If total fixed costs are $40,000, what is variable cost per unit?arrow_forwardGiven the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent. Cost Machine Hours March $3,140 15,134 April 2,606 10,115 May 2,803 11,896 June 3,889 18,146 a.$0.16 b.$1.12 c.$1.08 d.$1.60arrow_forwardChapter 7 Problem Solution 1 Please select the correct answer and solve and explain. "Goodstone Tire Corp sells tires for $90 each. Per unit costs associated with producing and selling the tires are: Direct Materials $35 Direct Labor $10 Factory Overhead $20 The variable portion of the factory overhead is $8 per unit. A foreign company wants to purchase 1,000 tires for $65 each. Assuming Goodstone has excess capacity: 1) The incremental profit from special order will be $12,000 2) The incremental loss from the special order will be $25,000 3) The will be no incremental loss or profit from the special orderarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Cost Classifications - Managerial Accounting- Fixed Costs Variable Costs Direct & Indirect Costs; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=QQd1_gEF1yM;License: Standard Youtube License