Question

In: Accounting

Please explain the answer step by step: Computing Average Unit Costs The total monthly operating costs...

Please explain the answer step by step:

Computing Average Unit Costs
The total monthly operating costs of Chili To Go are:

$8,000+ $0.30X

where

X = servings of chili

(a) Determine the average cost per serving at each of the following monthly volumes: 100; 1,000; 5,000; and 10,000.

Round answers to one decimal place.

Volume Average Unit Cost
100 $Answer
1,000 $Answer
5,000 $Answer
10,000 $Answer

(b) Determine the monthly volume at which the average cost per serving is $0.70.
Answer servings of chili

Solutions

Expert Solution

(a) Determination of the average cost per serving at each of the following monthly volumes: 100; 1,000; 5,000; and 10,000:-
The total monthly operating costs of Chili To Go are : $8,000+ $0.30X
where X = servings of chili
Variable Cost per product:-
Volume of Serving Total monthly operating costs Average cost per serving
X Equation Calculation Amount
a b c d e =d/a
100 $8,000+ $0.30X $8,000+ $0.30(100) $                  8,030 $      80.3
1000 $8,000+ $0.30X $8,000+ $0.30(1000) $                  8,300 $        8.3
5000 $8,000+ $0.30X $8,000+ $0.30(5000) $                  9,500 $        1.9
10000 $8,000+ $0.30X $8,000+ $0.30(10000) $                11,000 $        1.1
(b) Determination of the monthly volume at which the average cost per serving is $0.70:-
Average cost per serving = $                    0.70
Total monthly operating costs = $                    0.70
Volume of Serving
$8,000+ $0.30X = $                    0.70
X
$8,000+ $0.30X = $ 0.70X
$8,000 = $ 0.70X - $0.30X
$8,000 = $ 0.40X
X = $8,000
$0.40
X = 20000 Servings of Chili
The monthly volume at which the average cost per serving is $0.70 is 20,000 servings of Chili

Feel free to ask any clarification, if required. Please provide feedback by thumbs up, if satisfied. It will be highly appreciated. Thank you.


Related Solutions

Unit costs are defined as a.   Marginal costs b.   Total costs c.   Average costs d.   Implicit...
Unit costs are defined as a.   Marginal costs b.   Total costs c.   Average costs d.   Implicit costs e.   Inverse costs Group of answer choices 2. In the 1890s, German courts were taking a very different approach to cartels and antitrust. What did the German court rule in the pulp cartel case? a. It ruled the cartel was in monopoly that was illegal b. It ruled that cartels were illegal, but that the wood pulp cartel was not a true cartel...
Exercise 2-3 Computing Total Job Costs and Unit Product Costs Using a Plantwide Predetermined Overhead Rate...
Exercise 2-3 Computing Total Job Costs and Unit Product Costs Using a Plantwide Predetermined Overhead Rate [LO2-3] Mickley Company’s plantwide predetermined overhead rate is $19.00 per direct labor-hour and its direct labor wage rate is $14.00 per hour. The following information pertains to Job A-500: Direct materials $ 280 Direct labor $ 140 Required: 1. What is the total manufacturing cost assigned to Job A-500? 2. If Job A-500 consists of 60 units, what is the unit product cost for...
Exercise 2-3 Computing Total Job Costs and Unit Product Costs Using a Plantwide Predetermined Overhead Rate...
Exercise 2-3 Computing Total Job Costs and Unit Product Costs Using a Plantwide Predetermined Overhead Rate [LO2-3] Mickley Company’s plantwide predetermined overhead rate is $19.00 per direct labor-hour and its direct labor wage rate is $14.00 per hour. The following information pertains to Job A-500: Direct materials $ 280 Direct labor $ 140 Required: 1. What is the total manufacturing cost assigned to Job A-500? 2. If Job A-500 consists of 60 units, what is the unit product cost for...
Alden Co.’s monthly unit sales and total cost data for its operating activities of the past...
Alden Co.’s monthly unit sales and total cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs. Month Units Sold Total Cost Month Units Sold Total Cost 1 315,500 $ 153,000 7 364,500 $ 311,084 2 160,500 96,750 8 265,500 147,250 3 260,500 201,100 9 76,900 69,500 4 200,500 95,500 10 145,500 126,125 5 285,500 197,000 11 89,500 89,500 6 185,500 107,500 12 95,500 86,150 1....
**PLEASE ANSWER ALL SUB-QUESTIONS AND EXPLAIN STEP BY STEP. PLEASE INCLUDE FORMULAE IN CORRECT FORMAT NOT...
**PLEASE ANSWER ALL SUB-QUESTIONS AND EXPLAIN STEP BY STEP. PLEASE INCLUDE FORMULAE IN CORRECT FORMAT NOT COMPUTED VERSIONS, PLEASE INCLUDE NOMENCLATURE FOR ALL FORMULAE USED.THANK YOU!*** Discuss the following in detail: (1) Equimolar counterdiffusion and unimolecular diffusion in liquids (2) For diffusion in liquids between counterdiffusion and unimolecular diffusion which is more commonly observed? Why is this observed?
**PLEASE ANSWER ALL SUB-QUESTIONS AND EXPLAIN STEP BY STEP. PLEASE INCLUDE FORMULAE IN CORRECT FORMAT NOT...
**PLEASE ANSWER ALL SUB-QUESTIONS AND EXPLAIN STEP BY STEP. PLEASE INCLUDE FORMULAE IN CORRECT FORMAT NOT COMPUTED VERSIONS, PLEASE INCLUDE NOMENCLATURE FOR ALL FORMULAE USED.THANK YOU!*** Methyl alcohol and water are brought into contact in such a way that the two components form a layer 1.00 cm thick on top of a 3cm deep layer of water. Both components(water and methyl alcohol) are mutually diffusing into each other at 270C, there is no mixing of water and methyl alcohol and...
No. of Products Total Variable Costs, $ Total Costs $ Average Fixed Cost $ Average Variable...
No. of Products Total Variable Costs, $ Total Costs $ Average Fixed Cost $ Average Variable Cost $ Average Total Cost $ Marginal Cost$ 0 0 1 12 2 20 3 24 4 27 5 40 6 65 7 98 Assume that the fixed cost is $80, calculate the above costs in the table and explain the difference between average total costs and marginal costs. In a graph illustrate the Average Total Cost and Marginal Cost Curves, explain their relationship....
Please show that answer step by step and explain clearly, thx!!!! 5. Does the accuracy of...
Please show that answer step by step and explain clearly, thx!!!! 5. Does the accuracy of a kNN classifier using the Euclidean distance change if you (a) translate the data (b) scale the data (i.e., multiply the all the points by a constant), or (c) rotate the data? Explain. Answer the same for a kNN classifier using Manhattan distance.
a) Find ABC’s average fixed costs, average variable costs, average total costs and marginal costs.
Quantity Total Fixed Cost Total Variable Cost 0 100 0 1 100 50 2 100 70 3 100 90 4 100 140 5 100 200 6 100 360 a) Find ABC’s average fixed costs, average variable costs, average total costs and marginal costs. b) Since ABC is charging the customers at the price of $50, it seems that the company cannot make a profit. The owner decides to shut down operations. What are ABC’s profits/losses? Should the owner shut down...
PLEASE ROUND TO THE NEAREST CENT FOR FINAL ANSWER Compare the monthly payments and total loan...
PLEASE ROUND TO THE NEAREST CENT FOR FINAL ANSWER Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a ​$130,000 loan. Option​ 1: a​ 30-year loan at an APR of 9.5​%. Option​ 2: a​ 15-year loan at an APR of 8.5%. -------------------------------------------------------------------- 1.) Find the monthly payment for each option. The monthly payment for option 1 is what? The...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT