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    Sauban Ahmed
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    Dan's Sandwich Shop reported unit sales of 2,100 in April and 2,700 in May. Costs included variable costs like food and supplies that increased with units sold, fixed costs like rent and depreciation that stayed the same each month, and mixed costs like wages that had both fixed and variable portions. To predict costs for other volumes, a schedule was developed separating each cost into a fixed monthly amount and variable cost per unit to create a cost estimating equation for total monthly expenses.

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    CLASS QUESTION.1

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    Dan's Sandwich Shop reported unit sales of 2,100 in April and 2,700 in May. Costs included variable costs like food and supplies that increased with units sold, fixed costs like rent and depreciation that stayed the same each month, and mixed costs like wages that had both fixed and variable portions. To predict costs for other volumes, a schedule was developed separating each cost into a fixed monthly amount and variable cost per unit to create a cost estimating equation for total monthly expenses.

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    © All Rights Reserved
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    20 views1 page

    Class Question.1

    Uploaded by

    Sauban Ahmed
    Dan's Sandwich Shop reported unit sales of 2,100 in April and 2,700 in May. Costs included variable costs like food and supplies that increased with units sold, fixed costs like rent and depreciation that stayed the same each month, and mixed costs like wages that had both fixed and variable portions. To predict costs for other volumes, a schedule was developed separating each cost into a fixed monthly amount and variable cost per unit to create a cost estimating equation for total monthly expenses.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
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    CLASS QUESTION

    Dan’s Sandwich Shop reported the following results for April and May 2017.

    Description April May


    Unit sales 2,100 2,700
    Cost of food sold Rs 1,575 Rs 2,025
    Wages and salaries 1,525 1,675
    Rent on building 1,500 1,500
    Depreciation on equipment 200 200
    Utilities 710 770
    Supplies 225 255
    Miscellaneous 113 131
    Total 5,848 6,556

    Required:
    a. Identify each cost as being variable, fixed or mixed.

    b. Develop a schedule identifying the amount of each cost that is fixed per month or variable per
    unit. Total the amounts in each category to develop a cost estimating equation for total monthly
    costs.

    c. Predict total and average costs for monthly volumes of 1,000 units and 2,000 units.

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