Cost-Volume Profit Analysis

Guiseppe is operating a restaurant. Fixed costs are 45,000 $. Average cost of food and other variable costs are 3.20 $. The average bill is 8$. The income tax rate is 30 %, the net target profit is 105,000 $ (i.e. after income tax).

a) How many customers are needed to earn a net target profit of 105,000 $ and to break even? (6 points)

b) Calculate the net target profit if you have 15,000 customers! (3 points) c) What is the normal-markup percentage for an average bill given 15,000

customers?
d) Calculate the operating leverage for 15,000 customers.

Please make an example of converison cost

"what was conversion cost per unit example by steps"

Please show step by step

Cost of Goods Sold, Cost of Goods Manufactured Gauntlet Company has the following information for January: Cost of direct materials used in production $ 37,000 Direct labor 46,000 Factory overhead 20,000 Work in process inventory, January 1 22,000 Work in process inventory, January 31 30,000 Finished goods inventory, January 1 24,000 Finished goods inventory, January 31 18,000 a. For January, determine the cost of goods manufactured. $ b. For January, determine the cost of goods sold. $

Describe how the long run average cost curve is an envelope of short run average cost curves.

US healthcare system faces in regard to cost, quality, and access (equity). Namely:

Cost:      1) The US spends the most on healthcare costs

            2) Healthcare costs are rising faster than wages

Quality:   1) The US has some of the worst health outcomes among all countries

                2) Quantity rather than quality of care is reimbursed

                3) Adverse drug events cost $3.5 billion, and result in 700,000 emergency

                    department visits, and 120,000 hospitalizations annually

Access/ 1) Health disparities exist between groups

Equity:   2) Unequal access to services disproportionately affecting poor, rural & minority

                     groups

               3) We have a shortage of primary care providers

For each of these areas (cost, quality, and access/equity), propose at least 1 solution and list at least 1 possible barrier to implementing that solution.

The cafeteria at X Company incurred the following costs in September: Cost Item Cost Supervisor salary $5,920 Hourly workers wages 32,088 Food 11,074 Equipment 6,810 Supplies 3,118 Total $59,010 The hourly workers wages, food costs, and supplies costs were variable; the supervisor salary and equipment costs were fixed. The cafeteria served 13,000 meals during September. In October, the cafeteria is expected to serve 12,350 meals. Using account analysis with this data, estimate the total cafeteria cost in October [round variable costs per unit to two decimal places]?

Entries for Costs in a Job Order Cost System

Velasco Co. uses a job order cost system. The following data summarize the operations related to production for July:

1. Materials purchased on account, $695,900
2. Materials requisitioned, $584,560, of which $75,990 was for general factory use
3. Factory labor used, $716,780, of which $136,190 was indirect
4. Other costs incurred on account for factory overhead, $167,020; selling expenses, $257,480; and administrative expenses, $153,100
5. Prepaid expenses expired for factory overhead, $32,010; for selling expenses, $27,140; and for administrative expenses, $19,490
6. Depreciation of office building was $93,250; of office equipment, $47,320; and of factory equipment, $32,010
7. Factory overhead costs applied to jobs, $396,660
8. Jobs completed, $918,590
9. Cost of goods sold, $890,750

Required:

Journalize the entries to record the summarized operations. If an amount box does not require an entry, leave it blank.

a. Materials purchased on account, $695,900.

b. Materials requisitioned, $584,560, of which $75,990 was for general factory use.

c. Factory labor used, $716,780, of which $136,190 was indirect.

d. Other costs incurred on account for factory overhead, $167,020; selling expenses, $257,480; and administrative expenses, $153,100.

e. Prepaid expenses expired for factory overhead, $32,010; for selling expenses, $27,140; and for administrative expenses, $19,490.

f. Depreciation of office building was $93,250; of office equipment, $47,320; and of factory equipment, $32,010.

g. Factory overhead costs applied to jobs, $396,660.

h. Jobs completed, $918,590.

i. Cost of goods sold, $890,750.

1.    Gideon currently has a fixed annual cost of $800,000, variable cost of $20 per unit, and a selling price of $50 per unit. What is Gideon’s current breakeven point?

2.    Continuing from the prior problem, Gideon is studying the possibility of expanding with a new factory because demand for their product is more than they can service in the old factory. If they proceed with this plan their annual fixed costs will increase to $1,500,000. Their variable cost per unit and selling price per unit will stay the same. What is Gideon’s new breakeven point with the new factory?

3.    Instead of expanding into the new plant, what are some other alternatives Gideon could use to meet this increased demand. Mention at least one alternative and talk about a strength of this alternative and a weakness of this alternative.

4.    Dexter Corporation projects the following units and selling prices:

                           Year 1              Year 2              Year 3              Year 4

Unit sales                                  1,000              1,500              2,000                3,000

Selling price per unit                      $10                   $12                   $15                   $18

Please calculate Dexter’s projected or proforma sales.

5.    Continuing from the prior problem, Dexter has the following fixed cost per year and variable cost per unit each year:

                                                Year 1              Year 2              Year 3              Year 4

Annual fixed costs                    $2,000              $2,100              $2,200              $2,400

Variable costs per unit                    $5                     $6                   $8                     $9

Assuming these are all the costs for Dexter. Please calculate Dexter’s projected or proforma profit.

Classifying Cost Behavior
For each of the graphs displayed below, select the most appropriate cost behavior pattern where the lines represent the cost behavior pattern, the vertical axis represents total costs, the horizontal axis represents total volume, and the dots represent actual costs. Each pattern may be used more than once.

Using the drop-down box next to each cost description below, select the number to the graph that best depicts the cost behavior pattern.