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In: Accounting
The cafeteria at X Company has the following cost and activity information for the first five...
The cafeteria at X Company has the following cost and activity information for the first five months of 2019: Month Cost Meals January $29,379 7,200 February 31,157 7,636 March 31,787 7,790 April 34,059 9,000 May 31,057 7,611 Using the high-low method with this data, estimate the total cafeteria cost in December, when 9,600 meals are expected to be served [round variable costs per unit to two decimal places].
Solutions
Expert Solution
| Total Factory Overhead cost | ||
| No. of meals | Meal cost | |
| High level of activity | 9,000 | $34,059 |
| Low level of activity | 7,200 | $29,379 |
| Change | 1,800 | $4,680 |
| Variable maintainance cost per meal =$4,680 / 1,800 meals =$2.60 per meal | ||
| Fixed cost element =$34,059 - (9,000 meals*$2.60) | ||
| Fixed cost element =$34,059 - $23,400 =$10,659 | ||
| Y =$10,659 + $2.60X | ||
| Total Factory Overhead cost =$10,659 + 9,600*$2.60 =$35,619 | ||
ekkarill92 answered 2 years agoRelated Solutions
The cafeteria at X Company has the following cost and activity information for the first five...
The cafeteria at X Company has the following cost and activity
information for the first five months of 2019:
Month
Cost
Meals
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7,500
February
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8,204
March
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7,955
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9,200
May
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8,003
Using the high-low method with this data, estimate the total
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served [round variable costs per unit to two decimal places].
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$24,000
2,900 letters
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2,990 letters
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