Concept explainers
Consider the following information for a local concession stand’s first four weeks of operation:
Using the high-low method, what is the equation for total operating cost for this concession stand?
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Managerial Accounting
- Cullumber provides shuttle service between 4 hotels near a medical center and an international airport. Cullumber uses two 10- passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is as follows. Sales (1,370 passengers) Variable costs Fuel Tolls and parking Maintenance Contribution margin Fixed costs Salaries Depreciation (straight-line) Insurance Net income Break-even point Break-even point $3,836 $ 2,359 655 12,300 1,100 1,000 $34,250 6,850 Calculate the break-even point in (1) sales dollars and (2) number of passengers. 27,400 14,400 $13,000 passengersarrow_forwardCalculate the profit(loss) for an accounting period using the following information; Food sales $600,000, Labor Costs $ 350,000, Operating Overhead (Operating Expenses) $250,000, Food Cost 40%, Total Sales $1,000,000, Beverage Sales 40%, Beverage Cost $80,000. Show all work in proper sequence and form.arrow_forwardSheridan Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and brake repair. Oil change-related services represent 80% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 20% of its sales and provides a 40% contribution margin ratio. The company's fixed costs are $15,580,800 (that is, $77,904 per service outlet). Sales mix is determined based upon total sales dollars.arrow_forward
- Atlantis Company is placing an ad in the local paper to advertise its products. The ad will run for one week at a total cost of P5, 500. Atlantis Company has four categories of products as follows: Product Category % of floor space Expected sales value A 20 35,000 B 15 15,000 C 45 64,500 D 20 25,500 A. What amount of advertising cost should be allocated to product category A, assuming Atlantis allocates based on percent of floor space occupied? B. What amount of advertising cost should be allocated to product category B, assuming Atlantis allocates based on percent of floor space occupied?arrow_forwardDepict in graphical format, total costs, total revenue, margin of safety and thebreakeven point for a Track meet at the UBSC, which has a capacity of 8,000spectators. The meet’s tickets are $25. The club hosting the meet is set toreceive 65% of ticket sales. Fixed costs for the stadium are $20,000.00arrow_forwardAtlantis Company is placing an ad in the local paper to advertise its products. The ad will run for one week at a total cost of P5, 500. Atlantis Company has four categories of products as follows: Product category % of floor space occupied Expected sales value A 20 P35,000 B 15 15,000 C 45 64,500 D 20 25,500 What amount of advertising cost should be allocated to product category A, B, C, and D assuming Atlantis allocates based on percent of floor space occupied?arrow_forward
- Show the hotel’s cost structure by indicating the percentage of the hotel’s revenue represented by each item on the income statement. Suppose the hotel’s revenue declines by 15 percent. Use the contribution-margin percentage to calculate the resulting decrease in net income.arrow_forwardAssume a hotel rented 400, 480, and 420 rooms in the months of April, May, andJune, respectively; and the total housekeeping costs for the three months in question were $6,000, $6,800, and $6,200. With use of the high-low method, what is theamount of monthly fixed housekeeping costs?a. $1,000b. $1,500c. $2,000d. $2,500arrow_forwardIn a 30-day period a restaurant was open for nine hours per day. Costs incurred in the period totalled GH¢65,124. The following additional information is available: Number of tables available=15, Number of seats per table=4, customer turnaround is 1 hour and Seating occupancy achieved is 60%. What was the cost per customer?A. GH¢4·02B. GH¢6·70C. GH¢16·08D. GH¢26·80arrow_forward
- Tucker Pup’s Pet Resort offers dog boarding services in Chicago. Assume that in March, when dog- days occupancy was at an annual low of 150 days, the average cost per dog-day was $65. In July, when dog-days were at a capacity level of 600, the average cost per dog-day was $20. a.Develop an equation for monthly operating costs. b.Determine the average boarding cost per dog-day at an annual volume of 4,500 dog-days.arrow_forwardTucker Pup's Pet Resort offers dog boarding services in Chicago. Assume that in March, when dog- days occupancy was at an annual low of 150 days, the average cost per dog-day was $65. In July, when dog-days were at a capacity level of 600, the average cost per dog-day was $20. a. Develop an equation for monthly operating costs. b.Determine the average boarding cost per dog-day at an annual volume of 4,500 dog-days.arrow_forwardAssume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked): Rent (fixed) $ 3,000 Supplies (variable) $ 4.00q Utilities (mixed) $150 + $0.75q The company’s planned level of activity was 2,000 hours and its actual level of activity was 1,900 hours. If these are the company’s only three expenses and the company uses revenue formula of $8.40q for budgeting purposes, what net operating income would appear in the company’s flexible budget?arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning