Question
In: Accounting
The D.K. Pizza House has provided you with the following information on its costs at various...
-
The D.K. Pizza House has provided you with the following information on its costs at various levels monthly sales.
Monthly sales in units 3,000 6,000 9,000
Cost of food sold 4,500 9,000 13,500
Payroll costs 3,500 5,000 6,500
Supplies 600 1,200 1,800
Utilities 360 420 480
Other operating costs 1,500 3,000 4,500
Building rent 1,000 1,000 1,000
Depreciation 200 200 200
Total $11,660 $19,820 $27,980
Required:
-
Identify each cost as variable, fixed or mixed?
-
Develop an equation to estimate total costs at various levels of activity?
-
Project total costs with monthly sales of 8,000?
Solutions
Expert Solution
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P6-2B The Piano Studio Ltd. has provided you with the following information with respect to its...
P6-2B
The Piano Studio Ltd. has provided you
with the following information with respect to its piano inventory
for the month of August. The company uses the specific
identification cost formula.
Date
Explanation
Supplier
Serial #
Unit Cost/Price
Aug. 1
Beginning inventory
Yamaha
YH6318
$1,800
Kawai
KG1268
1,800
Kawai
KG1520
900
Suzuki
SZ5716
1,400
Suzuki
SZ5828
1,900
Steinway
ST8411
2,900
Steinway
ST0944
2,500
10
Sales
Suzuki
SZ5828
3,000
Kawai
KG1268
2,100
15
Purchases
Yamaha
YH4418
1,600
Yamaha
YH5632
1,900
18...
P6-2B The Piano Studio Ltd. has provided you with the following information with respect to its...
P6-2B
The Piano Studio Ltd. has provided you
with the following information with respect to its piano inventory
for the month of August. The company uses the specific
identification cost formula.
Date
Explanation
Supplier
Serial #
Unit Cost/Price
Aug. 1
Beginning inventory
Yamaha
YH6318
$1,800
Kawai
KG1268
1,800
Kawai
KG1520
900
Suzuki
SZ5716
1,400
Suzuki
SZ5828
1,900
Steinway
ST8411
2,900
Steinway
ST0944
2,500
10
Sales
Suzuki
SZ5828
3,000
Kawai
KG1268
2,100
15
Purchases
Yamaha
YH4418
1,600
Yamaha
YH5632
1,900
18...
Sheffield Inc. has provided you with the following information. This company purchases its inventory from a...
Sheffield Inc. has provided you with the following information.
This company purchases its inventory from a supplier for cash and
has only cash sales. Sheffield uses the average cost formula in a
perpetual inventory system. Increased competition has recently
reduced the price of the product.
Date
Explanation
Units
Unit
Cost
Unit Price
Apr.
1
Beginning inventory
50
$78
6
Purchases
110
89
8
Sales
(130
)
$120
15
Purchases
120
68
20
Sales
(120
)
102
27
Purchases
20
59...
Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs: Fixed Cost per Month...
Wyckam Manufacturing Inc. has provided the following information
concerning its manufacturing costs:
Fixed Cost
per Month
Cost per
Machine-Hour
Direct materials
$
5.50
Direct labor
$
42,900
Supplies
$
0.40
Utilities
$
2,000
$
0.25
Depreciation
$
14,900
Insurance
$
11,900
For example, utilities should be $2,000 per month plus $0.25 per
machine-hour. The company expects to work 4,200 machine-hours in
June. Note that the company’s direct labor is a fixed cost.
Required:
Prepare the company’s planning budget for June....
Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs: Fixed Cost per Month...
Wyckam Manufacturing Inc. has provided the following information
concerning its manufacturing costs:
Fixed Cost
per Month
Cost per
Machine-Hour
Direct materials
$
5.50
Direct labor
$
42,000
Supplies
$
0.10
Utilities
$
1,400
$
0.25
Depreciation
$
15,400
Insurance
$
11,300
For example, utilities should be $1,400 per month plus $0.25 per
machine-hour. The company expects to work 4,400 machine-hours in
June. Note that the company’s direct labor is a fixed cost.
Required:
Prepare the company’s planning budget for June....
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store called Pizza House:
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13
11
9
7
5
3
1
Quantity
1
2
3
4
5
6
7
Currently, Pizza House is selling pizzas at $9 each. Recently, a
world-famous chef opened a new pizza store called Pizza Palace that
specializes in organic healthy pizzas to compete against Pizza
House. So far, Pizza Palace has gotten many good customer reviews.
Pizza Palace sells its pizza for...
Cost Classification: The Lee’s have provided you with the following costs and relevant information that are...
Cost Classification: The Lee’s have provided you with the
following costs and relevant information that are assumed for year
20XY.
A. Classify each of the costs (a.
through j.) below under C. as a variable cost or a fixed cost.
B. Explain the importance of
distinguishing between variable and fixed costs.
C. Prepare a budgeted income
statement, assuming 600 units to be produced and sold, a per unit
selling price of $85, an income tax rate of 28% and the...
Cost Classification: The Lee’s have provided you with the following costs and relevant information that are...
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following costs and relevant information that are assumed for year
20XY.
A. Classify each of the costs (a.
through j.) below under C. as a variable cost or a fixed cost.
B. Explain the importance of
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C. Prepare a budgeted income
statement, assuming 600 units to be produced and sold, a per unit
selling price of $85, an income tax rate of 28% and the...
Cost Classification: The Lee’s have provided you with the following costs and relevant information that are...
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following costs and relevant information that are assumed for year
20XY.
A. Classify each of the costs (a.
through j.) below under C. as a variable cost or a fixed cost.
B. Explain the importance of
distinguishing between variable and fixed costs.
C. Prepare a budgeted income
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House price and number of bedrooms Suppose that you are provided the following data on house...
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