Cost Behavior Sushil and Sunil own a local Subway, and they reported the followi
ID: 2481955 • Letter: C
Question
Cost Behavior Sushil and Sunil own a local Subway, and they reported the following results for Nov and Dec Nov Dec Unit Sales 1,500 2,000 Cost of Food Sold $ 3,000 $ 4,000 Wages and Salaries 1,525 1,675 Rent 1,500 1,500 Depreciation 200 200 Utilities 710 770 Supplies 450 600 Miscellaneous 75 100 Total $ 7,460 $ 8,845 a. Identify each cost as being fixed, variable or mixed. b. Determine the equation for total operating costs (Fixed + Unit Variable Cost * # of sandwiches) c. Predict the total operating costs for 2500 3500 sandwiches d. Determine the average costs for 2500 3500 sandwiches Cost Behavior Sushil and Sunil own a local Subway, and they reported the following results for Nov and Dec Nov Dec Unit Sales 1,500 2,000 Cost of Food Sold $ 3,000 $ 4,000 Wages and Salaries 1,525 1,675 Rent 1,500 1,500 Depreciation 200 200 Utilities 710 770 Supplies 450 600 Miscellaneous 75 100 Total $ 7,460 $ 8,845 a. Identify each cost as being fixed, variable or mixed. b. Determine the equation for total operating costs (Fixed + Unit Variable Cost * # of sandwiches) c. Predict the total operating costs for 2500 3500 sandwiches d. Determine the average costs for 2500 3500 sandwichesExplanation / Answer
a
(b)
c.total operating cost
2500=1605+(2.77*25,00)=8,530
3500=1605+(2.77*35,00)=11,300
(d)
Average8530+11300/2
=9915
Nov Dec Cost per unit Cost per unit Unit Sales 1,500.00 2,000.00 Cost of Food Sold 3,000.00 4,000.00 2.00 2.00 Variable cost per unit is same Wages and Salaries 1,525.00 1,675.00 1.02 0.84 Mixed Rent 1,500.00 1,500.00 1.00 0.75 Fixed Total cost is same Depreciation 200.00 200.00 0.13 0.10 Fixed Total cost is same Utilities 710.00 770.00 0.47 0.39 Mixed Supplies 450.00 600.00 0.30 0.30 Variable cost per unit is same Miscellaneous 75.00 100.00 0.05 0.05 Variable cost per unit is same Total 7,460.00 8,845.00