Pillar Drycleaners has capacity to clean up to 5000 garments per month. Requirements 1. Complete the...

Pillar Drycleaners has capacity to clean up to 5000 garments per month.

Requirements

1.	Complete the schedule below for the three volumes shown.
2.	Why does the average cost per garment change?
3.	Suppose the owner, Darren Pillar, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 2,000 garments. Would he overestimate or underestimate his total costs? By how much?

Requirement 1. Complete the following schedule for the three volumes shown. (Round all unit costs to the nearest cent and all total costs to the nearest whole dollar.)

	2,000	3,500	5,000
	Garments	Garments	Garments
Total Variable Costs		$3,150
Total Fixed Costs
Total Operating Costs

Variable Cost Per Garment
Fixed Cost Per Garment		$2.20
Average Cost Per Garment

Expert Solution

ekkarill92 answered 2 years ago

PricePrice Drycleaners has capacity to clean up to 6 comma 0006,000 garments per month. Requirements 1....

PricePrice Drycleaners has capacity to clean up to 6 comma 0006,000 garments per month. Requirements 1. Complete the schedule below for the three volumes shown. 2. Why does the average cost per garment change? 3. Suppose the owner, DavisDavis PricePrice, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 3 comma 0003,000 garments. Would hehe overestimate or underestimate hishis total costs? By how much? Requirement 1. Complete the following schedule for...

Cost Behavior Prepare income statement in two formats Farnsworth Drycleaners has capacity to clean up to...

Cost Behavior Prepare income statement in two formats Farnsworth Drycleaners has capacity to clean up to 7,500 garments per month. The following operating data is available for Farnsworth. Amount charged per garment for dry cleaning: $10.00 Variable cost per garment: $0.70 Fixed costs per month: $14,400 Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instruction tab you will be marked...

Zephram Corporation has a plant capacity of 200,000 units per month. Unit costs at capacity are:...

Zephram Corporation has a plant capacity of 200,000 units per month. Unit costs at capacity are: Direct materials $6.00 Direct labor 5.00 Variable overhead 4.00 Fixed overhead 2.00 Marketing—fixed 6.00 Marketing/distribution—variable 4.60 Current monthly sales are 190,000 units at $30.00 each. Q, Inc., has contacted Zephram Corporation about purchasing 2,500 units at $24.00 each. Current sales would not be affected by the one-time-only special order. What is Zephram's change in operating profits if the one-time-only special order is accepted?

The capacity for regular time production is 200 units per month. Overtime capacity is 100 per...

The capacity for regular time production is 200 units per month. Overtime capacity is 100 per month. Subcontracting is also available. The demand forecast is 100, 400, and 300, for month 1, month 2, and month 3, respectively. The per-unit cost for regular time production, overtime production, and subcontracting is $1, $2, and $3, respectively. Inventory cost is $1 per unit per period (on average inventory). The beginning inventory for the first period is zero. Develop a chase strategy (under...

Q.1 The Immanuel Company has the capacity to produce 75,000 bins per month. Fixed production costs...

Q.1 The Immanuel Company has the capacity to produce 75,000 bins per month. Fixed production costs are $120,000 per month, and the company currently sells 70,000 bins at $13 each based on the following unit costs: - Variable production cost $5.60 - Fixed production costs 1.60[Based on capacity] - Variable selling expense 1.00 The Immanuel Co has just obtained a request for a special order of 6,000 bins to be shipped at the end of the month at a selling price of $10 each. The price...

Suppose that the ABC Corporation has a production (and sales) capacity of $1,000,000 per month. Its...

Suppose that the ABC Corporation has a production (and sales) capacity of $1,000,000 per month. Its fixed costs – over a considerable range of volume – are $350,000 per month, and the variable costs are $0.50 per dollar of sales. What is the annual break even chart (D’)? Develop (graph) the break even chart. What would be the effect on D’ of decreasing the variable cost per unit by 25% if the fixed costs thereby increased by 10%? What would...

A plant has a capacity of 4,100 hydraulic pumps per month. The fixed cost is $504,000...

A plant has a capacity of 4,100 hydraulic pumps per month. The fixed cost is $504,000 per month. The variable cost is 4166 per pump, and the sales price is $328 per pump (assume that sales equal output volume). What is the breakeven point in number of pumps per month? What percentage reduction will occur in the breakeven point if fixed costs reduced by 18% and unit variable cost by 6%?

Suppose a manager hires a technician to operate the machine for $5000 per month. The firm’s...

Suppose a manager hires a technician to operate the machine for $5000 per month. The firm’s monthly revenue depends on only two factors: (1) luck and (2) effort exerted by the technician. The probability of having good luck and that of having bad luck are both 0.5. The technician can choose to exert high effort or low effort, depending on which option maximizes his monthly income. Assume that low effort does not cost the technician while high effort costs him...

The Immanuel Company has the capacity to produce 75,000 bins per month. - Fixed production costs...

The Immanuel Company has the capacity to produce 75,000 bins per month. - Fixed production costs are $120,000 per month, and the company currently sells 70,000 bins at $13 each based on the following unit costs: - Variable production cost $5.60 - Fixed production costs 1.60[Based on capacity] - Variable selling expense 1.00 The Immanuel Co has just obtained a request for a special order of 6,000 bins to be shipped at the end of the month at a selling...

A company provides meal services to 5000 customers a month, at a cost $17.50 per meal....

A company provides meal services to 5000 customers a month, at a cost $17.50 per meal. The company has a sale for a month reducing the cost per meal by 10% and receives an additional 1000 orders that month. What is the Elasticity Coefficient for the meal service? Question 5 options: 2 .2 2.1 1.2

Question