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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- Breadmaster produces organic bread that is sold by the loaf. Each loaf requires 1/2 of a pound of flour. The bakery pays $2.00 per pound of the organic flour used in its loaves. The bakery expects to produce the following number of loaves in each of the upcoming four months: July $1540 Loaves August $1820 Loaves Sep. $1660 Loaves Oct. $1460 Loaves The bakery has a policy that it will have 20% of the following month's flour needs on hand at the end of each month. At the end of June, there were 154 pounds of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter. Begin the direct materials budget by determining the total quantity needed, then complete the budget. (Enter the pounds per unit as a decimal to two places. Round your calculations to the nearest whole number.)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 occupied value A 20 P35,000 1515,000 45 64,500 D 2025,500 What amount of advertising cost should be allocated to product category A, assuming Atlantis allocates based on percent of floor space occupied ?Louie's Meals produces frozen meals, which it sells for $7 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months inbusiness: January February Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan 1,600 meals Feb 1,900 meals Production. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan 2,000 meals Feb 1,600 meals Variable manufacturing expense per meal. . . . . . . . . . Jan $4 Feb $4 Sales commission expense per meal. . . . . . . . . . . . . . Jan $1 Feb $1 Total fixed manufacturing overhead. . . . . . . . . . . . . Jan $800 Feb $800 Total fixed marketing and administrative expenses. . Jan $300 Feb $300 Requirement 1. Compute the product cost per meal…
- Ligo Co. a sardines canning company had the following purchases as inputs for its manufacturing operations during the month: Tin cans, inclusive of VAT P 80,000 Tomatoes 150,000 Sardines 200,000 Labels, inclusive of VAT 20,000 Total P 450,000 What is the presumptive input VAT allowable to Ligo? What is the creditable input VAT of Ligo for the month?Gia’s Foods produces frozen meals, which it sells for $8 each. The company computes a new monthly fixed manufacturing overhead rate based on the planned number of meals to be produced that month. All costs and production levels are exactly as planned. The following data are from Gia’s Foods first month in business. January2007 Sales 1,000 meals Production 1,400 meals Variable manufacturing cost per meal $4.00 Sales commission cost per meal $1.00 Total fixed manufacturing overhead $700 Total fixed marketing and administrative costs $600 Requirements: i) Compute the product cost per meal produced under absorption costing and under variable costing. ii)Prepare the income statement for January 2007 using variable costing iii) List three situations in which marginal costing, as a technique, aids decision-making.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. Compute the economic order quantity for oats. Compute the carrying and ordering costs for the EOQ.
- ABC Company has monthly requirement of 900 units of Material B. The ordering cost per delivery is P450 and the carrying cost per unit is P27. In an economic order quantity, how many is the total deliveries during the year? a.18 b.13 c.5 d.9Healthy Dinners Co. produces frozen dinners for the health conscious consumer. During the quarter ended September 30, the company had the following cost data:Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 2,900 meals: Amount Per Unit Sales revenue $ 17,110 $ 5.90 Costs of meals produced 12,905 4.45 Gross profit $ 4,205 $ 1.45 Administrative costs 2,320 0.80 Operating profit $ 1,885 $ 0.65 Fixed costs included in this income statement are $4,321 for meal production and $580 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.45 per meal for 300 meals on April 10. Maria has sufficient idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected. Required: a. What…
- Murphy’s Foods produces frozen meals, which it sells for $7 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company’s first two months in business: The table shows the following data with cost in dollars: Sales January: 1,400 meals February: 1,600 meals Production January: 2,000 meals February: 1,400 meals Variable manufacturing expense per meal January: 5 February: 5 Sales commission expense per meal January: 1 February: 1 Total fixed manufacturing overhead January: 700 February: 700 Total fixed marketing and administrative expenses January: 500 February: 500 Requirements 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for…Nicky's Entrees produces frozen meals, which it sells for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: January February Sales 1,200 Meals 1,600 Meals Production 1,600 Meals 1,500 Meals Variable manufacturing expense per meal $3 $3 Sales commission expense per meal $1 $1 Total fixed manufacturing overhead $1,200 $1,200 Total fixed marketing and administrative expenses $800 $800 Requirements 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February. 2. Prepare separate monthly income statements for January and for February, using the following: a. Absorption costing b. Variable costing.…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 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?