1.
Fixed and Variable Cost Behavior: Fixed cost lump-sum amount remains the same for a given period while the variable cost for per unit produced remains same. When cost behavior is discussed, an estimation must be made about operating levels.
To calculate the company’s fixed cost, variable cost, total cost and average cost per cup of coffee at various levels of activity as given.
2.
Fixed and Variable Cost Behaviour: Fixed cost lump-sum amount remains the same for a given period while the variable cost for per unit produced remains same. When cost behaviour is discussed, an estimation must be made about operating levels.
To determine whether the average cost per cup of coffee served increase, decrease or remain the same as the number of cups coffee served in a week increases.
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Introduction to Managerial Accounting - Connect Access
- Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekdy expense of a coffee stand is $1.400 and the variable cost per cup of coffee served is $0.54. 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.) Cups of Coffee Served in a Week 700 800 900 Fixed cost Variable cost Total cost Average cost per cup of coffee served Required 2 >arrow_forwardEspresso Express operates a number of espresso coffee stands in busy suburban maills. The fixed weekly expense of a coffee stand is $700 and the variable cost per cup of coffee served is $0.40 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? increase 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 800 Cups of Coffee Served in a Week 900 $0 $0 $ Required T 1,000 Required 2 > 0arrow_forwardEspresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weeklyexpense of a coffee stand is $1,200 and the variable cost per cup of coffee served is $0.22.Required:1. Fill in the following table with your estimates of total costs and cost per cup of coffee at the indicatedlevels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent.Cups of Coffee Served in a Week2,000 2,100 2,200Fixed cost ........................................................ ? ? ?Variable cost ................................................... ? ? ?Total costs ....................................................... ? ? ?Average cost per cup of coffee served ........... ? ? ?2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the numberof cups of coffee served in a week increases? Explain.arrow_forward
- Koffee Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,100 and the variable cost per cup of coffee served is $0.26. Required: Fill in the following table with your estimates of total costs and average cost per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent. Cups of Coffee Served in a Week 1,800 1,900 2,000 Fixed cost . . . . . . . . . . . . . . . . . . . . . . . . . . ? ? ? Variable cost . . . . . . . . . . . . . . . . . . . . . . . . ? ? ? Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . ? ? ? Average cost per cup of coffee served . . . ? ? ? Does the average cost per cup of coffee served increase, decrease, or remain the same as the number…arrow_forwardAble Transport operates a tour bus that they lease with terms that involve a fixed fee each month plus a charge for each mile driven. Able Transport drove the tour bus 4,000 miles and paid a total of $1,250 in March. In April, they paid $970 for 3.000 miles. What is the variable cost per mile if Able Transport uses the high-low method to analyze costs?arrow_forwardJolly Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Bolton Air. Jolly's fixed costs are $25,500 per month. Bolton Air charges passengers $1,300 per round-trip ticket. Read the requirement LOADING... . Begin by selecting the formula to calculate the breakeven points. Breakeven number of units = Fixed costs ÷ Contribution margin per unit Next, select the formula to calculate the number of tickets needed to meet the target operating income. Quantity of units required to be sold = ( Fixed costs + Target operating income ) ÷ Contribution margin per unit Now complete the requirement for each of the cases. Begin with case 1. Case 1: Jolly's variable costs are $44 per ticket. Bolton Air pays Jolly 6% commission on ticket price. Jolly must sell tickets to break even and…arrow_forward
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- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College