Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost Employee Hours January February March $7,000 360 8,140 550 9,899 630 April May June July August 9,787 610 8,490 480 7,450 350 9,490 570 7,531 310
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Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and
Construct a Cost Function
Refer to the information for Pizza Vesuvio on the previous page. Pizza
Vesuvio's controller wants to calculate the fixed and variable costs
associated with labor used in the restaurant.
Required:
Using the high-low method, calculate the fixed cost of labor, calculate
the variable rate per employee hour, and construct the cost formula for
total labor cost.
Use the following information for Brief Exercises 3-17 through 3-20:
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- Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows:bre27076_ch06_256-305.indd 292 7/14/09 11:44:37 PMAmount Percent of SalesSales ............................................ $80,000 100%Variable expenses ....................... 32,000 40%Contribution margin ..................... 48,000 60%Fixed expenses ........................... 38,000Net operating income .................. $10,000Required:1. Compute the company’s degree of operating leverage.2. Using the degree of operating leverage, estimate the impact on net operating income of a 5% increasein sales.3. Verify your estimate from part (2) above by constructing a new contribution format income statementfor the company assuming a 5% increase in sales.Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format incomestatement for a recent month for the two games appears below:Claimjumper Makeover TotalSales ............................................ $30,000 $70,000 $100,000Variable expenses ...................... 20,000 50,000 70,000Contribution margin ..................... $10,000 $20,000 30,000Fixed expenses .......................... 24,000Net operating income .................. $ 6,000Required:1. Compute the overall contribution margin (CM) ratio for the company.2. Compute the overall break-even point for the company in sales dollars.3. Verify the overall break-even point for the company by constructing a contribution format incomestatement showing the appropriate levels of sales for the two products.Refer to the following information from a long term care facility for questions 6-10. April May June Ending Food Inventory 2319 2831 2462 Food Purchased 8126 9037 8496 Labor costs 12363 11974 12197 Supply costs 512 592 551 6282 Operating Costs 6791 6547 119 121 123 Average Daily Census What is the value of the food used in June? OA. $11,327 B. $10,958 O C. $8496 O D. $8865 QUESTION 7 Click Save and Submit to save and submit. Click Save All Answers to save all answers.
- 8. Day Mail Order Co. applied the high-low method of cost estimation to customer order data for the first four months of 2020. What is the estimated variable order filing cost component per order? Orders 1,200 1,300 1,800 1,700 Costs Р3,120 3,185 January February March 4,320 3,895 April а. Р2.00 b. P2.42 с. Р2.48 d. P2.50 e. None of these; answer isDohini Manufacturing Company had the following 12 months of data on purchasing cost andnumber of purchase orders. Month Purchasing Cost Number of Purchase OrdersJanuary $18,860 370February 18,065 330March 19,250 370April 18,050 410May 19,345 400June 19,500 450July 19,670 460August 20,940 560September 19,430 440October 20,020 500November 18,800 470December 19,340…Green Tea’s data show the following information for the financial year, beginning July 2020: July Aug. Sept. Oct. Nov. Estimated sales (units) 25,000 25,000 27,000 27,500 28,000 Sales price per unit $31 $31 $31 $31 $31 Direct labour per unit $1.75 $1.75 $1.50 $1.50 $1.50 Labour rate per hour $21 $21 $24 $24 $24 New machinery will be added in September. This machine will reduce the labour required per unit and increase the labour rate for those employees qualified to operate the machinery. Finished goods inventory is required to be 20% of the next month’s requirements. Direct material requires 2.5 kg per unit at a cost of $5 per kg. The ending inventory required for direct materials is 20% of the next month’s needs. In July, the beginning inventory is 3,750 units of finished goods and 13,125 kg of materials. Required: i) Prepare a production budget for the first quarter of the year (i.e. July – September).…
- Case 2:Muscat Tubes Manufacturing LLC are the manufacturer of picture tubes for T.V. The following are the details of their operation during 2019. Rate of consumption per week is 200 units for Muscat Tubes Manufacturing LLC. Company estimated inventory carrying cost at 20% per annum. The ordering cost per order is RO 100. The cost incurred for purchasing a tube is RO 500. The rate of consumption per week is 100 to 300 units and lead time to supply is 6 to 8 weeks. During emergency purchase the lead time is 2 weeks.Calculate the following: a. Reorder levelb. Maximum level of stockc. Minimum level of stockd. Average level of stocke. Danger LevelThe following data pertains to Western Company’s materials inventory: Number of pounds required annually 16,000 Cost of placing an order P20 Annual carrying cost per pound of material P4What is the EOQ?Use the table mentioned below and calculate the average monthly amount of each 3 drivers. Number of Machine Hours Purchase Orders Moves (Mhr) (PO) July 340 5400 250 Aug. 380 5200 300 Sept. 400 5800 450 Oct. 500 6200 380 Nov. 480 6000 340 Dec. 420 5600 200 Total 2520 34200 1920
- Drainee purchases direct materials each month. Its payment history shows that 65% is paid in the month of purchase with the remaining balance paid the month after purchase. Prepare a cash payment schedule for January using this data: in December through February, it purchased $22,000, $25,000, and $23,000 respectively.Melchar Company uses 78,125 pounds of oats each year. The cost of placing an order is 18, and the carrying cost for one pound of oats is 0.45. Required: 1. Compute the economic order quantity for oats. 2. Compute the carrying and ordering costs for the EOQ.Restaurant Sales Summary for month of February, 2018. Item Prime Rib Fish n Chips Barbecued Duck Total sold 690 560 350 425 280 Cheese Burger Baked Lasagna Total a. Number of Covers sold per day_ PPOP % S.P. $19.00 $14.00 $11.00 $10.00 $11.00 Revenue b. Cost of average covers - $_ c. Total Revenue in the Restaurant in the month of February 2018 d. Restaurant has 50 seats, what is the restaurant turnover ratio?